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Pareto-Improving Redistribution and Pure Public Goods

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  • Cornes, Richard
  • Sandler, Todd

Abstract

In the pure public good model, the Nash equilibrium associated with one initial income distribution may Pareto dominate the equilibrium associated with another distribution of the same aggregate income. We explore this possibility and examine its implications for Pareto-improving policy intervention by undertaking a comparative static analysis of Pareto-improving tax-financed increases in pure public good provision. Under some circumstances, a government can engineer policies that raise public good provision while increasing the well-being of contributors and non-contributors. Crucial factors promoting this outcome involve a large number of non-contributors, a high marginal valuation for the public good by non-contributors and a large aggregate response of contributors to changes in their income. Copyright Verein fü Socialpolitik and Blackwell Publishers Ltd 2000.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

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  • Cornes, Richard & Sandler, Todd, 2000. "Pareto-Improving Redistribution and Pure Public Goods," Staff General Research Papers Archive 1833, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:1833
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    Cited by:

    1. Vicary, Simon & Sandler, Todd, 2002. "Weakest-link public goods: Giving in-kind or transferring money," European Economic Review, Elsevier, vol. 46(8), pages 1501-1520, September.
    2. Buchholz, Wolfgang & Cornes, Richard & Rübbelke, Dirk, 2012. "Matching as a cure for underprovision of voluntary public good supply," Economics Letters, Elsevier, vol. 117(3), pages 727-729.
    3. Marjit, Sugata & Sarkar, Sandip, 2016. "Distributional Neutral Welfare Ranking-Extending Pareto Principle," MPRA Paper 74928, University Library of Munich, Germany.
    4. Indraneel Dasgupta, "undated". "Why Praise Inequality? Public Good Provision, Income Distribution and Social Welfare," Discussion Papers 08/07, University of Nottingham, School of Economics.
    5. Sugata Marjit & Anjan Mukherji & Sandip Sarkar, 2018. "Pareto Efficiency, Inequality and Distribution Neutral Fiscal Policy - An Overview," Discussion Papers Series 590, School of Economics, University of Queensland, Australia.
    6. Nigar Hashimzade & Gareth D. Myles, 2009. "Announcement or Contribution? The Relative Efficiency of Manipulated Lindahl Mechanisms," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(4), pages 565-598, August.
    7. Akram Temimi, 2001. "Does Altruism Mitigate Free-riding and Welfare Loss?," Economics Bulletin, AccessEcon, vol. 8(5), pages 1-8.
    8. Dasgupta, Indraneel & Kanbur, Ravi, 2007. "Community and class antagonism," Journal of Public Economics, Elsevier, vol. 91(9), pages 1816-1842, September.
    9. Wolfgang Buchholz & Richard Cornes & Dirk Rübbelke, 2011. "Matching as a Cure for Underprovision of Voluntary Public Good Supply: Analysis and an Example," CESifo Working Paper Series 3374, CESifo Group Munich.
    10. Jun-ichi Itaya & Atsue Mizushima, 2016. "Should Income Inequality be Praised? Multiple Public Goods Provision, Income Distribution and Social Welfare," CESifo Working Paper Series 6215, CESifo Group Munich.
    11. Weifeng Liu, 2014. "Pareto Improvements under Matching Mechanisms in a Public Good Economy," CAMA Working Papers 2014-63, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    12. Indraneel Dasgupta, & Ravi Kanbur, "undated". "Should Egalitarians Expropriate Philanthropists?," Discussion Papers 07/13, University of Nottingham, CREDIT.
    13. Indraneel Dasgupta & Ravi Kanbur, 2011. "Does philanthropy reduce inequality?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(1), pages 1-21, March.
    14. Bardhan, Pranab & Ghatak, Maitreesh & Karaivanov, Alexander, 2007. "Wealth inequality and collective action," Journal of Public Economics, Elsevier, vol. 91(9), pages 1843-1874, September.
    15. Grossmann, Volker, 2003. "Income inequality, voting over the size of public consumption, and growth," European Journal of Political Economy, Elsevier, vol. 19(2), pages 265-287, June.
    16. Richard Cornes & Roger Hartley, 2007. "Aggregative Public Good Games," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(2), pages 201-219, April.
    17. Neslihan Uler, 2011. "Public goods provision, inequality and taxes," Experimental Economics, Springer;Economic Science Association, vol. 14(3), pages 287-306, September.
    18. Rübbelke Dirk T.G. & Sheshinski Eytan, 2005. "Transfers as a Means to Combat European Spillovers," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 225(6), pages 699-710, December.
    19. Uler, Neslihan, 2009. "Public goods provision and redistributive taxation," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 440-453, April.
    20. Schweinberger, Albert G. & Lahiri, Sajal, 2006. "On the provision of official and private foreign aid," Journal of Development Economics, Elsevier, vol. 80(1), pages 179-197, June.

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