On the Legitimacy of Coercion for the Financing of Public Goods

Felix Bierbrauer

No 2663, CESifo Working Paper Series from CESifo

Abstract: The literature on public goods has shown that efficient outcomes are impossible if participation constraints have to be respected. This paper addresses the question whether they should be imposed. It asks under what conditions efficiency considerations justify that individuals are forced to pay for public goods that they do not value. It is shown that participation constraints are desirable if public goods are provided by a malevolent Leviathan. By contrast, with a Pigouvian planner, efficiency can be achieved. Finally, the paper studies the delegation of public goods provision to a profit-maximizing firm. This also makes participation constraints desirable.

Keywords: public goods; mechanism design; incomplete contracts; regulations (search for similar items in EconPapers)
JEL-codes: D82 H41 L51 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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