Research Papers in Economics, Department of Economics, Stockholm University
Decentralising Public Goods Production
Abstract: Decentralised decisions, to a bureau with a given budget,
about the production of public goods is analysed within a general
equilibrium model with a representative agent and no pure profits. It is
shown that decentralisation (i) does not necessarily imply aggregate
production effciency and (ii) need not be optimal even if all public goods
are neutral. Also, cost benefit criteria are derived and the marginal cost
of public funds is characterised.
Keywords: Cost benefit criteria; marginal cost of public funds; production effciency; delegation; decentralisation.; (follow links to similar papers)
JEL-Codes: H21; H41; H43; (follow links to similar papers)
21 pages, May 24, 2004
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