Collective Choice and Voluntary Provision of Public Goods

49 Pages Posted: 2 May 2018 Last revised: 28 Oct 2021

See all articles by Dennis Epple

Dennis Epple

Carnegie Mellon University; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

Richard Romano

University of Florida

Date Written: July 2000

Abstract

Some public goods are provided entirely with private contributions, others with a mixture of public and private funding, and still others are entirely publicly funded. To explain this variation, a model of dual provision is developed that endogenizes public and private funding. Members of the economy vote over an income tax that finances public supply of the good, and they vote on whether to permit private contributions. While permitting private contributions may lead to a reduction in total provision of the good, a majority always favors permitting private contributions. Results are developed for small and large economies, and the relevance of excludability and non-congestion are investigated. Comparative statics and computational analysis demonstrate properties of equilibrium.

Suggested Citation

Epple, Dennis and Romano, Richard, Collective Choice and Voluntary Provision of Public Goods (July 2000). Available at SSRN: https://ssrn.com/abstract=3170218

Dennis Epple (Contact Author)

Carnegie Mellon University ( email )

Tepper School of Business
Pittsburgh, PA 15213-3890
United States
412-268-1536 (Phone)
412-268-7357 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Richard Romano

University of Florida

PO Box 117165, 201 Stuzin Hall
Gainesville, FL 32610-0496
United States

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