Voluntary Provision of Public Goods and Administrative Costs

Kangoh Lee
Additional contact information
Kangoh Lee: Towson University, Maryland

Public Finance Review, 2006, vol. 34, issue 2, 195-211

Abstract: This article considers voluntary provision of public goods in the presence of administrative costs. Government collects taxes and provides grants to a charity. Using government grants and private donations, the charity provides a public good. Administrative costs are paid twice for the government and for the charity in the case of taxes, and less of a one dollar tax goes toward the public good than from a one dollar donation. Donations are thus more efficient in terms of administrative costs than taxes. Donors then wish to donate more than in the standard model without administrative costs, and donors decrease their donations less than one dollar in response to a one-dollar increase in taxes. This partial crowding out caused by administrative costs helps explain the coexistence of the public provision and private provision of public goods in a number of contexts.

Keywords: donations; administrative costs; crowding out (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/1091142105283295 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:34:y:2006:i:2:p:195-211

DOI: 10.1177/1091142105283295

Access Statistics for this article

More articles in Public Finance Review
Bibliographic data for series maintained by SAGE Publications ().