INCENTIVES TO SUPPORT THE PUBLIC SECOTR UNDER OLIGOPOLY

Johan Willner

No 268517, Economic Research Papers from University of Warwick - Department of Economics

Abstract: We analyse a simple economy with a consumption good, an intermediate good and a public good, where there are capitalists, shop-keepers and worker. It follow that the capitalists and the shop-keepers would always vote for a lower tax rate than the workers although preferences are identical. No group would support a larger public sector than in the first-best solution under free entry and exit among the shop-keepers. A low tax rate would increase the number of supporters of low taxes and vice versa.

Keywords: Financial Economics; Public Economics (search for similar items in EconPapers)
Pages: 26
Date: 1992-09-09
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:268517

DOI: 10.22004/ag.econ.268517

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