On the Legitimacy of Coercion for the Financing of Public Goods

50 Pages Posted: 9 Dec 2009

See all articles by Felix J. Bierbrauer

Felix J. Bierbrauer

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods

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Date Written: December 1, 2009

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, Regulation

JEL Classification: D02, D82, H41, L51

Suggested Citation

Bierbrauer, Felix J., On the Legitimacy of Coercion for the Financing of Public Goods (December 1, 2009). FEEM Working Paper No. 98.2009. Available at SSRN: https://ssrn.com/abstract=1516223 or http://dx.doi.org/10.2139/ssrn.1516223

Felix J. Bierbrauer (Contact Author)

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

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