The efficient provision of public goods through non-distortionary tax contests∗
نویسندگان
چکیده
We use a simple balanced budget contest to collect taxes on a private good in order to finance a pure public good. We show that—with an appropriately chosen structure of winning probabilities—this contest can provide the public good efficiently and without distorting private consumption. We provide extensions to multiple public goods and private taxation sources, asymmetric preferences, and show the mechanism’s robustness across these settings. (JEL C7, D7.
منابع مشابه
On the possibility of efficient private provision of public goods through government subsidies
This paper investigates the possibility of implementing an efficient provision of a public good through distortionary tax-subsidy policies in a simple one-shot game of voluntary contributions. Within the class of all linear tax-subsidy policies two cases are distinguished. The first is where individual taxes only depend on the sum of all other individuals’ contributions. Although such policies ...
متن کاملDo Government Subsidies Increase the Private Supply of Public Goods?
We study three different models in which public goods are supplied by private contributions. In one of these models, tax-financed government subsidies to private contributions will definitely increase the equilibrium supply of public goods. In the other two models, government subsidies are neutralized by offsetting changes in private contributions. We explain why it is that these models lead to...
متن کاملOn the (Ir)Relevance of Distribution and Labor Supply Distortion to Government Policy
Should the assessment of government policies, such as the provision of public goods and the control of externalities, deviate from first-best principles to account for distributive effects and for the distortionary cost of labor income taxation? For example, is the optimal extent of public goods provision smaller than indicated by the Samuelson rule because finance is distortionary? Or should e...
متن کاملGovernment Debt and Optimal Monetary and Fiscal Policy
How do di¤erent levels of government debt a¤ect the optimal conduct of monetary and scal policies? And what do these optimal policies imply for the evolution of government debt over time? To provide an answer, this paper studies a standard monetary policy model with nominal rigidities and monopolistic competition and adds to it a scal authority that issues nominal non-state contingent debt, l...
متن کاملWelfare Impacts of Agri-Environmental Policies in an Open Economy: A Numerical General Equilibrium Framework
This paper uses a numerical general equilibrium model to evaluate the welfare impacts of alternative agri-environmental policies in an open economy while recognizing the presence of distortionary agricultural support subsidies and factor income taxes. In this context, the paper indicates that a revenue-neutral budget reform, which cuts all distortionary agricultural support subsidies and pays r...
متن کامل