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User Charges as Redistributive Devices

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  • Balestrino, Alessandro

Abstract

In this model, a mix of public and private provision of private goods arises naturally in the economy. We characterize the social optimum in the presence of a linear tax/public expenditure system and show how a user charge can be welfare- or Pareto-improving, when the users are the poor. The charge discourages the rich from opting into the public program and allows the policymaker to restructure the tax/expenditure system in a way that is beneficial for the poor. If the ensuing welfare gain is large enough to outweigh the loss for the remaining users, a charge is desirable. Copyright 1999 by Blackwell Publishing Inc.

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  • Balestrino, Alessandro, 1999. "User Charges as Redistributive Devices," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(4), pages 511-524.
    • Handle: RePEc:bla:jpbect:v:1:y:1999:i:4:p:511-24
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    2. Balestrino, Alessandro, 1999. "The Desirability of In-Kind Transfers in the Presence of Distortionary Taxes," Journal of Economic Surveys, Wiley Blackwell, vol. 13(4), pages 333-354, September.
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    Cited by:

    1. Alessandro Balestrino, 2000. "Mixed Tax Systems and the Public Provision of Private Goods," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(4), pages 463-478, August.
    2. ., 2013. "Using market mechanisms (for example, contracting out) for the efficient public provision of commodities," Chapters, in: Competition, Diversity and Economic Performance, chapter 12, pages 233-252, Edward Elgar Publishing.
    3. Bhattacharya, Sukanta & Saha, Sarani & Banerjee, Sarmila, 2016. "Income inequality and the quality of public services: A developing country perspective," Journal of Development Economics, Elsevier, vol. 123(C), pages 1-17.
    4. Fabbri, Daniele & Monfardini, Chiara, 2009. "Rationing the public provision of healthcare in the presence of private supplements: Evidence from the Italian NHS," Journal of Health Economics, Elsevier, vol. 28(2), pages 290-304, March.

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