Public good provision and the welfare effects of indirect tax harmonisation

The paper considers the welfare effect of the harmonisation of indirect taxes in two open economies. The revenue from taxation is used for the production of a non-tradeable public good. The welfare levels are affected via two channels: (i) changes in the levels of public good provision, and (ii) changes in deadweight loss associated with the taxes. We develop a number of rules of harmonisation and derive conditions under which they lead to potential Pareto improvement.

Conformism and reciprocity in public good provision

People contribute more to experimental public goods the more others contribute, a tendency called “crowding-in.” We propose a novel experimental design to distinguish two possible causes of crowding-in: reciprocity, the usual explanation, and conformity, a neglected alternative. Subjects are given the opportunity to react to contributions of a payoff-irrelevant group, in addition to their own group. We find evidence of conformity, accounting for roughly 1/3 of crowding-in.

On the limits of cheap talk for public good provision

This article studies a model where, as a consequence of private information, agents do not have incentive to invest in a desired joint project, or a public good, when they are unable to have prior discussion with their partners. As a result, the joint project is never undertaken and inefficiency is observed. Agastya, Menezes and Sengupta (2007) prove that with a prior stage of communication, with a binary message space, it is possible to have some efficiency gain since "all ex-ante and interim efficient equilibria exhibit a simple structure". We show that any finite message space does not provide efficiency gain on the simple structure discussed in that article. We use laboratory experiments to test these results. We find that people do contribute, even without communication, and that any kind of communication increases the probability of project implementation. We also observed that communication reduces the unproductive contribution, and that a large message space cannot provide efficiency gain relative to the binary one.

Municipalities secession and uncertainty on public goods provision

This paper investigates the causes of municipalities secession in Brazil. The theoretical model proposes that the median voter is not fully informed about the efficiency effect of secession on public good provision and uses the break up decision undertaken by neighbor’s municipalities within the state to account for his voting. Our empirical results confirms that prediction

Sharing the Cost of a Public Good: an Incentive-Constrained Axiomatic Approach

We study the problem of provision and cost-sharing of a public good in large economies where exclusion, complete or partial, is possible. We search for incentive-constrained efficient allocation rules that display fairness properties. Population monotonicity says that an increase in population should not be detrimental to anyone. Demand monotonicity states that an increase in the demand for the public good (in the sense of a first-order stochastic dominance shift in the distribution of preferences) should not be detrimental to any agent whose preferences remain unchanged. Under suitable domain restrictions, there exists a unique incentive-constrained efficient and demand-monotonic allocation rule: the so-called serial rule. In the binary public good case, the serial rule is also the only incentive-constrained efficient and population-monotonic rule.

Should a non-rival public good always be provided centrally?

This paper discusses the problem of optimal design of a jurisdiction structure from the view point of a utilitarian social planner when individuals with identical utility functions for a non-rival public good and private consumption have private information about their contributive capacities. It shows that the superiority of a centralized provision of a non-rival public good over a federal one does not always hold. Specifically, when differences in individuals’ contributive capacities are large, it is better to provide the public good in several distinct jurisdictions rather than to pool these jurisdictions into a single one. In the specific situation where individuals have logarithmic utilities, the paper provides a complete characterization of the optimal jurisdiction structure in the two-type case.

Health as a Public Good

The purpose of the article is to present different conceptualizations of health as a public good. Author considers whether analytical tools and conceptual framework developed in the studies on the issue of public goods might be useful in order to analyze health. It was noted that health belongs to the special group of exceptional goods, since it carries the characteristics of both private and public good. It was emphasized that the distribution of public goods is a complex issue that requires an appropriate system of incentives as well as instruments in charge of its proper functioning. In the article it is argued that the widespread social anxiety and growing fear of further integration and globalization to a large extend results from the wrong management and unequal provision of global public goods.

Digitisation of books in Australia for the public good

The National Cultural Policy (NCP) Discussion Paper highlights that the ‘National Broadband Network, with its high-speed broadband, will enable new opportunities for developing and delivering Australian content and applications reflecting our diverse culture and interests’.1 A significant source of content and knowledge is our books, in particular, out of print, in copyright books and books in the public domain. More and more people, especially those who are digitally literate, will demand that the store of knowledge in these hard-to-find (and at times, decaying) books be digitised and made readily accessible on the internet...

Art and the anxious city: Public art, public interest and the public good

While public art is often considered a key hallmark of a creative city, artworks in the public realm also have the capacity to act as lightening rods for social anxiety at times of perceived crisis. This paper considers recent debates about government-sponsored public art projects in Queensland in light of three international case studies: Rodin’s Thinker in Paris, Tilted Arc in New York and Vault in Melbourne. It considers whether consensus positions on public art are possible or desirable in light of issues of spatial control, and proposes that well-negotiated anxieties about public art may be an indicator of creative vibrancy and dynamism that will assist in the future understanding of Queensland’s experiment with government-mandated public art.

Insolvency specialists and government enquiries: A unique opportunity to contribute to the public good

This lecture addresses the contribution of research by insolvency specialists to the development of insolvency law and practice, in particular to the (re-)design of insolvency systems. It draws on examples from Australia of government enquiries to reform insolvency law as well as other areas of law with which it intersects. It comments on the role that insolvency specialists can play in such policy debates – not only insolvency academics but also scholarly practitioners – for the public good.

Unraveling Public Good Games: The Role of Priors

This paper provides experimental evidence on how players predict end game effects in a linear public good game. Our regression analysis yields a measure of the relative importance of priors and signals on subjects\' beliefs on contributions and allow us to conclude that, firstly, the weight of the signal is relatively unimportant, while priors have a large weight and, secondly, priors are the same for all periods. Hence, subjects do not expect end game effects and there is very little updating of beliefs.

Maintaining the "public good" nature of improved fish strains: dissemination of knowledge and materials

Many sources of information that discuss currents problems of food security point to the importance of farmed fish as an ideal food source that can be grown by poor farmers, (Asian Development Bank 2004). Furthermore, the development of improved strains of fish suitable for low-input aquaculture such as Tilapia, has demonstrated the feasibility of an approach that combines “cutting edge science” with accessible technology, as a means for improving the nutrition and livelihoods of both the urban poor and poor farmers in developing countries (Mair et al. 2002). However, the use of improved strains of fish as a means of reducing hunger and improving livelihoods has proved to be difficult to sustain, especially as a public good, when external (development) funding sources devoted to this area are minimal1. In addition, the more complicated problem of delivery of an aquaculture system, not just improved fish strains and the technology, can present difficulties and may go explicitly unrecognized (from Sissel Rogne, as cited by Silje Rem 2002). Thus, the involvement of private partners has featured prominently in the strategy for transferring to the public technology related to improved Tilapia strains. Partnering with the private sector in delivery schemes to the poor should take into account both the public goods aspect and the requirement that the traits selected for breeding “improved” strains meet the actual needs of the resource poor farmer. Other dissemination approaches involving the public sector may require a large investment in capacity building. However, the use of public sector institutions as delivery agents encourages the maintaining of the “public good” nature of the products.

Public goods in networks

This paper considers incentives to provide goods that are non-excludable along social or geographic links. We find, first, that networks can lead to specialization in public good provision. In every social network there is an equilibrium where some individuals contribute and others free ride. In many networks, this extreme is the only outcome. Second, specialization can benefit society as a whole. This outcome arises when contributors are linked, collectively, to many agents. Finally, a new link increases access to public goods, but reduces individual incentives to contribute. Hence, overall welfare can be higher when there are holes in a network. © 2006 Elsevier Inc. All rights reserved.