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The Normative Problem of Merit Goods in Perspective

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  • Maxime Desmarais-Tremblay

    (LSE (CPNSS) - London School of Economics, Centre for Philosophy of Natural and Social Science (CPNSS) - LSE - London School of Economics and Political Science, Centre Walras-Pareto - UNIL - Université de Lausanne = University of Lausanne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

In his Theory of Public Finance (1959), Musgrave invented the concept of merit wants to describe public wants that are satisfied by goods provided by the government in violation of the principle of consumer sovereignty. Starting from Musgrave's mature discussion (1987), I construct two categories to classify the explanations of merit goods. The first strand of thought attempts to justify merit goods within the New welfare economics, by modifying its assumptions to accommodate irrationality, uncertainty, lack of information, and psychic externalities. The second category encompasses more radical departures from consumer sovereignty, drawn from philosophical critiques of economics. In the third part of the paper, I argue that the two strands might be represented by a non-individualistic social welfare function. I also show how this solution echoes Musgrave's early views on public expenditures before he coined the concept of merit wants. From an historical perspective, the survival of the concept highlights the persistence of a social point of view in welfare economics.

Suggested Citation

  • Maxime Desmarais-Tremblay, 2016. "The Normative Problem of Merit Goods in Perspective," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01475763, HAL.
  • Handle: RePEc:hal:cesptp:hal-01475763
    DOI: 10.1080/07360932.2016.1196593
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    Cited by:

    1. Maxime Desmarais-Tremblay, 2017. "Paternalism and the public household. On the domestic origins of public economics," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01560189, HAL.
    2. Gerasimos T. Soldatos, 2020. "Merit goods and excise taxation in quasilinear markets for complementary private consumption," Public Sector Economics, Institute of Public Finance, vol. 44(4), pages 551-566.

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