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Public Provision of Private Goods and User Charges

Author

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  • Alessandro BALESTRINO

    (Università di Pisa)

Abstract

This paper deals with the question whether uniform provision of a purely private good should be implemented at the social optimum, in a second best economy where personalised lump-sum transfers are not feasible, but no market failure exists. The answer is that it depends on the balance of private and social gains and losses from public provision: necessary conditions for the optimality of uniform provision are derived and discussed. The sensitivity of these conditions to changing rules for the choice of the user charge is also investigated, and it is suggested that public provision is most likely to be optimal when it is free of charge. Finally, it is emphasized that the assumption that a perfect substitute for the publicly provided good is not available plays a crucial role in obtaining the above results.

Suggested Citation

  • Alessandro BALESTRINO, 1995. "Public Provision of Private Goods and User Charges," Discussion Papers (REL - Recherches Economiques de Louvain) 1995043, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvre:1995043
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    Citations

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    Cited by:

    1. Henry Ohlsson & Michael Lundholm, 1998. "Wages, taxes and publicly provided day care," Journal of Population Economics, Springer;European Society for Population Economics, vol. 11(2), pages 185-204.
    2. repec:bla:scandj:v:103:y:2001:i:4:p:625-43 is not listed on IDEAS
    3. Iregui, Ana Maria, 2005. "Decentralised provision of quasi-private goods: The case of Colombia," Economic Modelling, Elsevier, vol. 22(4), pages 683-706, July.
    4. repec:bla:jpbect:v:1:y:1999:i:4:p:511-24 is not listed on IDEAS
    5. Tisdell, Clement A., 2003. "The Efficient Public Provision of Commodities: Transaction Cost, Bounded Rationality and Other Considerations," Economic Theory, Applications and Issues Working Papers 90524, University of Queensland, School of Economics.
    6. ., 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.
    7. Thomas Bassetti & Luciano Greco, 2015. "Optimal Taxation and Productive Social Expenditure," "Marco Fanno" Working Papers 0196, Dipartimento di Scienze Economiche "Marco Fanno".
    8. Balestrino, Alessandro, 1997. "Education policy in a non-altruistic model of intergenerational transfers with endogenous fertility," European Journal of Political Economy, Elsevier, vol. 13(1), pages 157-169, February.

    More about this item

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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