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Why and how should the government finance public goods in rural areas? A review of arguments

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  • Petrick, M.

Abstract

This paper reviews three arguments why government should not directly finance public goods provision in the countryside: (1) sorting and voting of residents leads to efficient local public goods provision, (2) community governance may better cope with incomplete contracting in public goods, and (3) public provision drives out voluntary private provision of public goods. Theory and empirical evidence partly support these arguments. The adequate level of rural governance appears to be often below the European or national level, and policy should focus on the institutional premises of public goods provision rather than on centralized payments to public good providers.
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  • Petrick, M., 2007. "Why and how should the government finance public goods in rural areas? A review of arguments," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 42, March.
    • Handle: RePEc:ags:gewipr:259319
    DOI: 10.22004/ag.econ.259319
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    Cited by:

    1. Gramzow, Andreas, 2006. "Endogenous Initiatives As A Chance To Improve Rural Livelihood? Results Of A Case Study In Baltow, South-Eastern Poland," IAMO Discussion Papers 14900, Institute of Agricultural Development in Transition Economies (IAMO).
    2. Gramzow, Andreas, 2006. "Endogenous initiatives as a chance to improve rural livelihood? Results of a case study in Bal­tow, South-Eastern Poland [Tourismus als eine Möglichkeit zur Erhöhung des ländlichen Einkommens? Erge," IAMO Discussion Papers 95, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).

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