Hostname: page-component-78c5997874-dh8gc Total loading time: 0 Render date: 2024-11-05T13:58:58.998Z Has data issue: false hasContentIssue false
  • English
  • Français

Public Provision of Private Goods and User Charges

Published online by Cambridge University Press:  17 August 2016

Alessandro Balestrino
Alessandro Balestrino*
Affiliation:
Università di Pisa
Get access

Summary

This paper deals with the question whether uniform provision of a purely private good should be implemented at the social optimum, in a second best economy where personalised lump-sum transfers are not feasible, but no market failure exists. The answer is that it depends on the balance of private and social gains and losses from public provision: necessary conditions for the optimality of uniform provision are derived and discussed. The sensitivity of these conditions to changing rules for the choice of the user charge is also investigated, and it is suggested that public provision is most likely to be optimal when it is free of charge. Finally, it is emphasized that the assumption that a perfect substitute for the publicly provided good is not available plays a crucial role in obtaining the above results.

Résumé

Résumé

Cet article pose la question de savoir si la production uniforme d’un bien privé pur doit être réalisée au niveau correspondant à l’optimum social, dans dans le cadre d’une économie de second rang, où les transferts forfaitaires sont irréalisables, mais où le marché ne présente aucune défaillance. La réponse est que cela dépend de l’équilibre entre gain (pertes) privés et sociaux engendrés par une production publique. Les conditions nécessaires au caractère optimal de la production uniforme sont dégagées et discutées. La sensibilité de ces conditions au changement des règles de choix du mode de contribution sont également explorés. Il est suggéré que la production publique est plus que vraisemblablement optimale lorsqu’il y a absence de tarif. Enfin, il est mis en évidence que l’hypothèse d’absence de substitut au bien privé produit publiquement conditionne fortement de tels résultats.

Keywords

H42.H42.
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 61 , Issue 4 , 1995 , pp. 461 - 477
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1995 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

(*)

I would like to thank A. Cigno and A. Petretto for their comments on previous drafts of this paper. All errors are mine.

References

Arrow, K. [1971], Equality in Public Expenditure, Quarterly Journal of Ecnomics, 85(3), pp. 409–415.Google Scholar
Atkinson, A. and Stiglitz, J. [1980], Lectures on Public Economics, New York, McGraw-Hill.Google Scholar
Besley, T. [1991], Welfare Improving User Charges for Publicly Provided Private Goods, Scandinavian Journal of Economics, 93(4), pp. 495–510.Google Scholar
Besley, T. and Coate, S. [1991], Public Provision of Private Goods and the Redistribution of Income, American Economic Review, 81(3), pp. 979–984.Google Scholar
Blackorby, C. and Donaldson, D. [1988], Cash versus kind, Self-Selection, and Efficient Transfers, American Economic Review, 78(n° 4), pp. 691–700.Google Scholar
Boadway, R. and Marchand, M. [1995], The use of public expenditures for distributive purposes, Oxford Economic Papers, 47(1), pp. 45–59.Google Scholar
Bockstael, N. and Mcconnell, K. [1993], Public Goods as Characteristics Non-Market Commodities, Economic Journal, 103(5), pp. 1244–1257.Google Scholar
Bruno, M. [1976], Equality, Complementarity and the Incidence of Public Expenditure, Journal of Public Economics, 6(3), pp. 395–407.Google Scholar
Cremer, H. and Gahvari, F. [1993], In-Kind Transfers, Self-Selection and Optimal Tax Policy, mimeo, VPI, Blacksburg (VA).Google Scholar
Hare, P. [1988], Economics of Publicly Provided Private Goods and Services, in P. Hare (ed.), Surveys in Public Sector Economics, Oxford, Blackwell, pp. 68–101.Google Scholar
Ireland, N. [1990], The Mix of Social and Private Provision of Goods and Services, Journal of Public Economics, 43(2), pp. 201–219.Google Scholar
Goodspeed, T. and Schwab, R. [1993], Public Economics and the Theory of Rationing, Public Finance, 48(2), pp. 225–242.Google Scholar
Guesnerie, R. and Roberts, K. [1984], Effective Policy Tools and Quantity Controls, Econometrica, 52(1), pp. 59–82.Google Scholar
Mirrlees, J. [1976], Optimal Taxtheory: A Synthesis, Journal of Public Economics, 6(3), pp. 327–358.Google Scholar
Munro, A. [1991], The Optimal Public Provision of Private Goods, Journal Public Economics, 44(2), pp. 239–261.Google Scholar
Munro, A. [1992], Self-Selection and Optimal In-kind Transfers, Economic Journal, 102(5), pp. 1184–1196.Google Scholar
Neary, J. and Roberts, K. [1980], The Theory of Household Behaviour under Rationing, European Economic Review, 13(1), pp. 25–42.Google Scholar
Stern, N. [1987], The Theory of Optimal Commodity and Income Taxation: An Introduction, in Newbery, D. and Stern, N. (eds.), The Theory of Taxation in Developing Countries, New York, Oxford University Press, pp. 22–59.Google Scholar
Stiglitz, J. [1982], Self-Selection and Pareto-Efficient Taxation, Journal of Public Economics, 17(2), pp. 213–240.Google Scholar