NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Collective Choice and Voluntary Provision of Public Goods

Dennis Epple, Richard Romano

NBER Working Paper No. 7802
Issued in July 2000
NBER Program(s):   CH   PE

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.

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Document Object Identifier (DOI): 10.3386/w7802

Published: Epple, Dennis and Richard Romano. "Collective Choice And Voluntary Provision Of Public Goods," International Economic Review, 2003, v44(2,May), 545-572. citation courtesy of

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