In-kind benefits - the service of the public sector

Chapter 9 looks into in-kind benefits. They have been of increasing importance in many countries for various reasons, but mainly as an expression that if left to the market, there would be a more limited supply of services than socially desired, combined with the fact that it could lead to a significant degree of inequality in the access to these services. Explanations of why the public sector finances in-kind benefits vary, but basically it is largely based on a merit good argument in conjunction with the fact that collective solutions can be socially cheaper than individual solutions. Naturally, one will also need to discuss whether financing and producing the goods and services are connected, and how there can be different choices, including the use of user-charges as a way of making users indicate preferences for the different areas.