Public Goods in the Italian Tradition

The paper highlights the relationship between the main ideas on public goods put forth by the Italian tradition and the core of modern fiscal theory, i.e., the Samuelson-Musgrave model. Although Pantaleoni applied marginal utility analysis to the public sector in 1883, his scheme is very far from Samuelson’s theory of public expenditure, because he considered the allocation of budgetary funds by Parliament. It was De Viti de Marco who in 1888 was able to state Samuelson condition for efficient public goods provision. However, he and a number of Italian authors did not attach much importance to this result, because they were trying to build positive theories of State activity in general. Then, Italian tradition experienced a drift towards politics and sociology in so far as more and more relevance was given to political aspects of the problem. At the same time, still in the positive approach, new authors raised sharp criticisms to the marginal analysis as a viable tool in order to explain public economic activity. Then, public goods were no longer considered for their intrinsic nature. In particular Fasiani (the most prominent author in the twenty final years considered) not only defines public goods as anything that is produced by the government, but for him public goods’ indivisibility is due either to the consolidation of wants, or to the impossibility to evaluate the utility that each consumer gets from public goods.