Abstract

http://ssrn.com/abstract=2113779
 


 



Two Systems of Public Finance: Entrepreneurial and Parasitical


Steve H. Hanke


Johns Hopkins University - Department of Economics

Richard E. Wagner


George Mason University - Department of Economics

July 19, 2012

GMU Working Paper in Economics No. 12-35

Abstract:     
Expositions of the theory of public finance mostly assume that taxation must be the primary instrument for generating revenue. This assumption is neither historically accurate nor theoretically necessary. Rather, it universalizes an institutional arrangement that is particular to the nation-state, where taxation is the prime instrument of public finance. In contrast to this system of parasitical public finance, we explore a system of entrepreneurial public finance within a setting of city-states where attraction and not compulsion dominates public finance. Cities are corporate bodies which can be organized under diverse institutional arrangements. We use the United Arab Emirates to illustrate our analysis of divergent systems of public finance.

Number of Pages in PDF File: 39

Keywords: political entrepreneurship, parasitical political pricing, city-states, nation states, imperialism and public finance, public goods

JEL Classification: D020, D230, H110, H410

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Date posted: July 19, 2012  

Suggested Citation

Hanke, Steve H. and Wagner, Richard E., Two Systems of Public Finance: Entrepreneurial and Parasitical (July 19, 2012). GMU Working Paper in Economics No. 12-35. Available at SSRN: http://ssrn.com/abstract=2113779 or http://dx.doi.org/10.2139/ssrn.2113779

Contact Information

Steve H. Hanke
Johns Hopkins University - Department of Economics ( email )
3400 Charles Street
Baltimore, MD 21218-2685
United States
410-516-7183 (Phone)
410-516-8996 (Fax)
Richard E. Wagner (Contact Author)
George Mason University - Department of Economics ( email )
4400 University Drive
334 Enterprise Hall
Fairfax, VA 22030
United States
(703) 993-1132 (Phone)
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