Government and the provision of public goods : from equilibrium models to mechanism design

This paper investigates to what extent the seminal contribution of Samuelson (1954) hasbeen or not incorporated by the theories of general equilibrium and mechanism designin their analysis of optimal public good provision and more generally of optimal publicpolicy. Our conclusion is that, far from taking up the challenges raised by Samuelson’scontribution, both paradigms lead to the negative conclusion of the impossibility of a fullydecentralized optimal public goods provision through market or market-like institutions,without giving a key for (re)defining the role of state in market economies. JEL Classification Code: B2, H4