PART I Public Infrastructure Support for Industry: Common Property versus Collective Property

Public infrastructure and other publicly provided services that benefit industry fall into two board categories: pure and congestible. This paper explores the implications of both types of public inputs. The differences between the two have considerable implications for the design of tax and spending policy. In particular, this paper highlights the effects of a congestible public input as being analogous to a free-access or common property resource. Efficiency requires that fundamentally different means of financing each type. __________________ * We are very grateful for the generous support of the Economic and Social Research Institute of Japan’s Cabinet Office. We also thank the Kansai Institute for Social and Economic Research for its assistance. Helpful comments from Mutsumi Matsumoto are gratefully acknowledged. We retain sole responsibility for remaining errors.