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Taxes or Fees? The Political Economy of Providing Excludable Public Goods

Kurtis Swope () and Eckhard Janeba ()

No 542, CESifo Working Paper Series from CESifo

Abstract: This paper provides a positive analysis of public provision of excludable public goods financed by uniform taxes or fees. Individuals differing in preferences decide using majority-rule the provision level and financing instrument. The median preference individual is the decisive voter in a tax regime, while an individual with preferences above the median generally determines the fee in a fee regime. Numerical solutions indicate that populations with uniform or left-skewed distributions of preferences choose taxes, while a majority coalition of high and low preference individuals prefer fees when preferences are sufficiently right-skewed. Public good provision under fees exceeds that under taxes in the latter case.

Keywords: excludable public goods; public provision; voting (search for similar items in EconPapers)
Date: 2001
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Journal Article: Taxes or Fees? The Political Economy of Providing Excludable Public Goods (2005) Downloads
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