Scandinavian Working Papers in Economics
Research Papers in Economics,
Stockholm University, Department of Economics
No 2004:6: Decentralising Public Goods Production
Michael Lundholm ()
Additional contact information
Michael Lundholm: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden
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.
21 pages, May 24, 2004
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wp04_06.pdf
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