On the Legitimacy of Coercion for the Financing of Public Goods

The literature on public goods has shown that efficient outcomes are impossible if participation constraints have to be respected. This paper addresses the question whether they should be imposed. It asks under what conditions efficiency considerations justify that individuals are forced to pay for public goods that they do not value. It is shown that participation constraints are desirable if public goods are provided by a malevolent Leviathan. By contrast, with a Pigouvian planner, efficiency can be achieved. Finally, the paper studies the delegation of public goods provision to a profit-maximizing firm. This also makes participation constraints desirable.


Subject(s):
Issue Date:
2009
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/55325
Total Pages:
50
JEL Codes:
D02; D82; H41; L51
Series Statement:
IM
98.2009




 Record created 2017-04-01, last modified 2017-04-04

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