Samuelson machines and the optimal public-private mix

Simon Clark and Ravi Kanbur

Economics Bulletin, 2006, vol. 8, issue 13, 1-11

Abstract: Standard economic analysis assumes the sets of public and private goods to be exogenously given. Yet societies very often choose the public-private mix, using resources to convert seemingly private goods into ones with public goods characteristics and vice versa. In practice, we see a bewilderingly large variety of public-private mixes across societies. This papers advances an analysis of the choice of the public-private mix in the framework of voluntary contributions to public goods provision, by envisaging that, starting from a situation where all goods have private characteristics, some goods can be changed to have public goods characteristics at a cost (by purchasing a "Samuelson machine"). It characterizes the jointly optimal choice of the public-private mix and the efficient supply or not of the public goods in the mix. This characterization generates a number of testable predictions on the public-private mix, and on the prevalence of free riding

JEL-codes: D6 H0 (search for similar items in EconPapers)
Date: 2006-12-01
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http://www.accessecon.com/pubs/EB/2006/Volume8/EB-06H00002A.pdf (application/pdf)

Related works:
Working Paper: Samuelson Machines and the Optimal Public-Private Mix (2002)
Working Paper: Samuelson Machines and the Optimal Public-Private Mix (2002)
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