On the Neutrality of Redistribution in a General Equilibrium Model with Public Goods

Posted: 10 Oct 2006

See all articles by Antonio Villanacci

Antonio Villanacci

University of Florence

Ünal Zenginobuz

Bogazici University - Department of Economics; Bogazici University - Center for Economic Design (CED)

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Abstract

Models on private provision of public goods typically involve a single private good and linear production technology for the public good. We study a model with several private goods and non-linear (strictly concave) production technology. We revisit the question of "neutrality" of government interventions on equilibrium outcomes and show that relative price effects that are absent with a single private good and linear production technology become a powerful channel of redistribution in this case. Contrary to previous results, redistributing endowments in favor of contributors is shown to be neither necessary nor sufficient for increasing the equilibrium level of public good.

Keywords: public goods, private provision, neutrality results, general equilibrium

JEL Classification: D51, H41

Suggested Citation

Villanacci, Antonio and Zenginobuz, Ünal, On the Neutrality of Redistribution in a General Equilibrium Model with Public Goods. Journal of Public Economic Theory, Forthcoming, Available at SSRN: https://ssrn.com/abstract=936193

Antonio Villanacci

University of Florence ( email )

Piazza di San Marco, 4
Florence, 50121
Italy
(055) 4223944 (Fax)

Ünal Zenginobuz (Contact Author)

Bogazici University - Department of Economics ( email )

Bebek
Istanbul, TR 34342
Turkey
+90 212 359 65 05 (Phone)
+90 212 287 24 53 (Fax)

HOME PAGE: http://www.econ.boun.edu.tr/zobuz

Bogazici University - Center for Economic Design (CED) ( email )

Bogazici University
P.K. 2 Bebek
Istanbul, 34342
Turkey
+90 212 287 24 76 (Phone)
+90 212 287 24 53 (Fax)

HOME PAGE: http://www.ced.boun.edu.tr

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