Social Welfare and Coercion in Public Finance
Stanley L. Winer
Carleton University - School of Public Policy and Administration; Carleton University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); International Centre for Economic Research (ICER)
University of Ulster - School of Economics
California State University, Fullerton - Department of Economics
CESifo Working Paper Series No. 2482
This paper develops an expanded framework for social planning in which the existence of coercion is explicitly acknowledged. Key issues concern the precise definition of coercion for individuals and in the aggregate, its difference from redistribution, and its incorporation into normative analysis. We explore modifications to traditional rules for optimal fiscal policy in the presence of coercion constraints and determine the degree of coercion implied by traditional social planning. The paper maps the trade-off between social welfare and aggregate coercion and explores its implications for normative policy and the comparative evaluation of institutions, including competitive democracy.
Number of Pages in PDF File: 50
Keywords: coercion, redistribution, social planning, optimal fiscal policy, marginal cost of funds, public goods, collective choice
JEL Classification: D70, H10, H20, H21working papers series
Date posted: December 8, 2008
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