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Social Welfare and Coercion in Public Finance

Author

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  • Stanley L. Winer
  • George Tridimas
  • Walter Hettich

Abstract

This paper develops an expanded framework for social planning in which the existence of coercion is explicitly acknowledged. Key issues concern the precise definition of coercion for individuals and in the aggregate, its difference from redistribution, and its incorporation into normative analysis. We explore modifications to traditional rules for optimal fiscal policy in the presence of coercion constraints and determine the degree of coercion implied by traditional social planning. The paper maps the trade-off between social welfare and aggregate coercion and explores its implications for normative policy and the comparative evaluation of institutions, including competitive democracy.

Suggested Citation

  • Stanley L. Winer & George Tridimas & Walter Hettich, 2008. "Social Welfare and Coercion in Public Finance," CESifo Working Paper Series 2482, CESifo.
    • Handle: RePEc:ces:ceswps:_2482
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. George Tridimas & Stanley L. Winer, 2018. "On the Definition and Nature of Fiscal Coercion," Carleton Economic Papers 18-09, Carleton University, Department of Economics.
    2. Stanley L. Winer, 2016. "The Political Economy of Taxation: Power, Structure, Redistribution," CESifo Working Paper Series 6252, CESifo.
    3. Elena Cettolin & Arno Riedl, 2011. "Partial Coercion, Conditional Cooperation, and Self-Commitment in Voluntary Contributions to Public Goods," CESifo Working Paper Series 3556, CESifo.
    4. Beat Hintermann & Thomas F. Rutherford, 2014. "Social Planning and Economic Coercion," CESifo Working Paper Series 5044, CESifo.
    5. Robin Boadway, 2011. "Viewpoint: Innovations in the theory and practice of redistribution policy," Canadian Journal of Economics, Canadian Economics Association, vol. 44(4), pages 1138-1183, November.
    6. Beat Hintermann & Thomas F. Rutherford, 2017. "Social planning and coercion under bounded rationality with an application to environmental policy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(5), pages 854-878, September.

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    More about this item

    Keywords

    coercion; redistribution; social planning; optimal fiscal policy; marginal cost of funds; public goods; collective choice;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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