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Government and the provision of public goods:from equilibrium models to mechanismdesign

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  • Monique Florenzano

Abstract

This paper investigates to what extent the seminal contribution of Samuelson has been or not incorporated by the theories of general equilibrium and mechanism design in their analysis of optimal public good provision, and more generally of optimal public policy. Our conclusion is that, far from taking up the challenges raised by Samuelson's contribution, both paradigms lead to the negative conclusion of the impossibility of a fully decentralized optimal public goods provision through market or market-like institutions, without giving a key for (re)defining the role of state in market economies.

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  • Monique Florenzano, 2010. "Government and the provision of public goods:from equilibrium models to mechanismdesign," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 17(4), pages 1047-1077.
    • Handle: RePEc:taf:eujhet:v:17:y:2010:i:4:p:1047-1077
    DOI: 10.1080/09672567.2010.499469
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    More about this item

    Keywords

    General equilibrium; Lindahl-Foley equilibrium; Wicksell-Foley public competitive equilibrium; private provision equilibrium; mechanism design; free-rider problem; incentive compatibility; principal-agent models;
    All these keywords.

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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