On the legitimacy of coercion for the nancing of public goods

Felix Bierbrauer

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: The literature on public goods has shown that e?cient 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 e?ciency 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, e?ciency can be achieved. Finally, the paper studies the delegation of public goods provision to a pro?t-maximizing ?rm. This also makes participation constraints desirable.

Keywords: Public goods; Mechanism Design; Incomplete Contracts; Regulation (search for similar items in EconPapers)
JEL-codes: D02 D82 H41 L51 (search for similar items in EconPapers)
Date: 2009-05
New Economics Papers: this item is included in nep-pbe
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