James Buchanan: Clubs and Alternative Welfare Economics

Alain Marciano

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Abstract: Buchanan did not write "An Economic Theory of Club" to complement Samuelson's analysis of public goods, but to develop a radically different, form of welfare economics – in which there is no social welfare function and individual utility functions cannot be "read" by external observers. It was the perspective Buchanan adopted to analyze the pricing of public goods and services, and from which he also envisaged clubs. The main feature Buchanan attributed to clubs was to implement a condition that made no sense in Samuelson's framework but that was crucial in Buchanan's and clubs made Samuelson's collective condition useless. Buchanan and Samuelson disagreed over the allocation of the costs of the public good on each individual. To Buchanan, it was by relying on individual's preferences. To Samuelson, by using a social welfare function. This has not much to do with the nature of the good, its "physical properties" to use Buchanan's words.

Date: 2021-08-01
New Economics Papers: this item is included in nep-cwa, nep-his, nep-hpe, nep-isf and nep-upt
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Published in Journal of Economic Perspectives, 2021, 35, pp.243 - 256. ⟨10.1257/jep.35.3.243⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03326422

DOI: 10.1257/jep.35.3.243

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