DOCSLIB.ORG

World Bank Document

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
World Bank Document Policy Research WOFkKING-PAPERS CountryOperations CountryDepartment Public Disclosure Authorized TheWorld Bank February1993 WPS 1090 GovernmentExpenditures as a Citizens' Evaluation of Public Output Public Disclosure Authorized Public Choice and the Benefit Principleof Taxation Public Disclosure Authorized ThanosCatsambas Elementsfrom the theoriesof publicchoice and benefit taxation are combinedto form a conceptualframework for quantifying citizens' preferences about privately available and publicly providedgoods and services.When the theoreticalresults were Public Disclosure Authorized applied to four Central European countries, under certain behavioraland stabilityassumptions, both the evaluationof and desired level of public output by individuals was found to be lower than that actuallyprovided by government. Poicy RewhWokingPapssdiinaMthefindi&nofwork in pmg nda conangethcexchangeofideas among Bank staffand aUrothmutestdindivecopmentissuesepapeamdistnbutedbytiReeachAdvis5 yStaff,cary thename ofthe uthors,reZflet onlytheirviws,andshoud beusd andcitedaccoringly.Tlhefindings,i ons.andconclusionsarthe awhom'own. heyshould not be sttlbuted to the Wodd Bank.its Boardof Directors,its management,or anyof its manber countries PolicyResearch CountryOperations WPS 1090 This paper-a product ofthe CountryOperations Division, Europe and CentralAsia, Cour.try Department 11-is part of a larger effort in the departmentto addressissues of economicpolicy in CentralEuropean countries through analytical techniquesbased on marketeconomic principles.Copies of the paper are available free from the World Bank, 1818H Street NW, Washington,DC 20433. Please contact Anita Correa, room H11-107, extension 38549 (February 1993, 16 pages). Combiningelements from the theories of public Interpretingindirect evidence,he shows that the choice and benefittaxation, Catsambasdevelops privaZasector wouldprefer less government a frameworkin whichprivate cidzens can acdvity in all countries,from a low of 5 percent evaluatepublic activities. less public spending(in Poland)to a high of one- third less (in Slovenia).If those governments Why, and under what circumstances,do were to followthose guidelines,their spending- "bureaucrats"increase the size of the public to-GDPratios wouldmore closelyresemble the sector and the amountof public spendingin their 1987-89average for a selectedgroup of own self interest? Europeanmarket economies. What does the private sector think public Catsambasalso introducesa more rigorous, output shouldbe, what is actual publicoutput, if not necessarilymore objective, approach to and how does the private sector evaluatethat determining"optimal" government spending. output? This approachrequires little information,but uses i static modeland requires faith in the Catsamrbasapplies the theoreticalresults of direcdon of causality for some key variables.To an attemptto answer these questionsin four the extent that one can accept those limitations, CentralEuropean countries(Czechoslowakia, the model may be a useful operationaltool in Hungary,Poland, and Slovenia),using actual public spendingevaluation. data for 1989-91and projectionsfor 1992. ThePolicy Research Working Paper Series disseminates the fmdings of workunder way in theBank. An objective of the series is to get these findings out quickly, even if presentationsare less than fully polished.The findings,interpretations, and conclusionsin thesepapers do not necessarilyrepresent official Bank policy. Producedby the PolicyResearch Dissemineion Center GOVERNMENT EXPENDITURES AS A CITIZENS' EVALUATION OF PUBLIC OUTPUT: PUBLIC CHOICE AND THE BENEFIT PRINCIPLE OF TAXATION THANOS CATSAMBAS CENTRALEUROPE DEPARTMENT THE WORLD BANK' I. INTRODUCTION The questionof the optimal level of public expenditureshas long concernedstudents of public finance. In his classical analysis of the efficient level of public expenditures,Samuelson [1954] introduceda reference private good and developedthe well-knowncondition that an optimal level of expenditurerequires that the sum of the marginal rates of substitutionbetween the public good and the private good must equal the marginal rate of transformationbetween the two goods. Samuelson's theoreticalresult assumes that all of the revenue needed to financepublic expenditurescan be raised with lump-sumtaxes. Since this is not generally possible, the result must be modified to accountfor the distortionaryeffects of an actual tax system. Ballardand Fullerton [1992] call this modification the "marginal cost of public funds" (MCF), and provide an interestingexplanation of how several earlier attempts to address this problem can be seen under the unifying prism of this concept. They argue that many importantcontributions, including the early Harberger [19641approach to the excess burden of taxation, and the subsequentcontributions by Stiglitz and Dasgupta [1971] and by Atkinson and Stern [1974], can all be interpreted along the lines of the MCF approach. Wilson [1991] persuasively argues that the optimal level of public good provision must take into account not only efficiency but also distributionalconsiderations. Along these lines, the relationshipbetween taxes and expenditures,and its implicationfbr the optimal provision of public output, can be seen from yet another angle, through the postulates of the "benefitprinciple of taxation". According to this approach, an equivalenceis drawn between the market mechanismand the provision of public expendituresthrough the budget. If tax payments are regarded as a "price" for the provision of public expendituresby Government, then taxes are related to expendituresthrough Samuelson's conditionof efficiency, namelythat the sum of unit tax shares must equal the stumof the marginal rates of substitution,which is equal to the marginal cost of the public good. This is all that is required for efficiency. If, by chance, the individualtax price (or unit tax share) is moreover equal to the individualmarginal rate of substitution,the situation is called a "Lindahlsolution", after Erik Lindahl 119581,who first described the analogy to market equilibrium of public expenditure determinationin connectionwith the distributionof tax burden among various groups. 2 I/ The author is gratefulto Martha de Melo for hcr insightfulcomments, but remains responsiblefor the analysis and conclusionsof this draft. 2! Perhaps a more appropriateterm would be thc "Lindahl-Johansen"solution, since it was the latter who popularized Lindahl's approach throughan excellentexposition. See L. Johansen11965]. This approach is related to the benefit principle of taxation because the taxes paid by individualsmay be interpreted as a "price" for the provisionof public expenditures. The optimal amount of public output is then determinedby the conditionthat the tax price must equal the marginal rate of substitutionbetween the public good and the reference private good. This is a powerful result, which has implicationsnot only for the efficient provisionof public expenditures,but also for their distributionalimplications. In a seminal article along tiese lines, Aaron and McGuire [19701analyze the evaluationof public output by individualsand concludethat the beneficiariesof government programs may have diverse perspectivesin their appreciationof public expendituresdepending on their perceived "tax price". In particular, Aaron-McGuireshow that if the unit tax share is less (more) than the marginal rate of substitutionfor an individual,the individualevaluates the public good higher (lower) than the tax it actuallypays to the Government. Therefore, if the actual tax shares are observed, we may determine whether the provisionof public output is higher or lower than the optimal amount desired by individuals. This condition, in turn, determines whether the provision of public services has a positive or negative redistributiveimpact on those individuals. II. PURPOSE AND CONCEPTUALFRAMEWORK OF THE PAPER This paper attempts to shed light on the issue of optimal governmentspending by modifying and extending the Lindahl-Aaron-McGuireapproach to benefit taxation. Its spirit is similar 'Loseveral recent contributionsin this area, which emphasizethe public choice approach to many old questions in public finance.3 In doing so, the analysis introduces elementsfrom the theory of bureaus, and attempts to combine the two approaches into a unified theory of optimal governmentspending. The theory of bureaus (Niskanen [19711,[1975]),recognizes that demand for governmentactivities is expressedthrough the political system, in which "bureaucrats"may play an independentand at the same time powerful role. The basic tenet of this theory is that divergent interests among different groups of society, and, notably, between citizens and bureaucrats, may lead to a discrepancybetween the amount of public services demandedby citizens and that provided by Government.4 In other words, the new theory of public finance recognizesthat the outcomeof governmentactivities depends on both the demand and the supply of goods and services to be provided by the public sector. In recent years particular attention has been paid to the institutionsof upply, i.e. the government bureaucracy, and on how their decisions may influencethe total amount of public services. This perspective is particularlyrelevant for countries that are emerging from a long system of commandeconomy, such as the countries of Central and Eastern Europe. The role of Government under the previous regimes was overwhelming,and it is not clear to what
Load more

Recommended publications
  • Egalitarian Liberalism and Economic Freedom
    University of Pennsylvania ScholarlyCommons Publicly Accessible Penn Dissertations 2019 Egalitarian Liberalism And Economic Freedom Pierce Randall University of Pennsylvania Follow this and additional works at: https://repository.upenn.edu/edissertations Part of the Philosophy Commons Recommended Citation Randall, Pierce, "Egalitarian Liberalism And Economic Freedom" (2019). Publicly Accessible Penn Dissertations. 3680. https://repository.upenn.edu/edissertations/3680 This paper is posted at ScholarlyCommons. https://repository.upenn.edu/edissertations/3680 For more information, please contact [email protected]. Egalitarian Liberalism And Economic Freedom Abstract This dissertation considers three major challenges to egalitarian liberal institutions made by classical liber- als: that egalitarian liberal institutions involve too much coercive interference with individual economic decisions, that free markets tend to do better at rewarding people on the basis of their economic choices, and that only by recognizing full liberal rights of ownership can a society best promote a stable property regime consistent with our pre-political conventions of ownership. Each of these objections fails, but they point to an underlying concern that egalitarian liberal institutions fail to adequately protect economic freedom. The dissertation then develops and defends a conception of economic freedom that is reflected in egalitar- ian liberal institutions. Economic freedom depends on the quality and availability of options individuals have in markets,
    [Show full text]
  • From Highway to Clubs: Buchanan and the Pricing of Public Goods Alain Marciano
    From Highway to Clubs: Buchanan and the Pricing of Public Goods Alain Marciano To cite this version: Alain Marciano. From Highway to Clubs: Buchanan and the Pricing of Public Goods. James M. Buchanan. Remaking Economics: Eminent Post-War Economists, Springer International Publishing, pp.713-737, 2018, 10.1007/978-3-030-03080-3_32. hal-02550420 HAL Id: hal-02550420 https://hal.archives-ouvertes.fr/hal-02550420 Submitted on 8 Dec 2020 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. 32 From Highway to Clubs: Buchanan and the Pricing of Public Goods Alain Marciano Introduction Not much has been written about the history of James Buchanan’s “An Economic Teory of Clubs” (1965a), which is one of the most impor- tant of his articles. In another work (Boettke and Marciano 2017), we have shown why Buchanan’s article should not be read as an answer or a complement of Charles Tiebout’s “A Pure Teory of Local Public Expenditures” (1956). Our objective is now to shed as much light as possible on why Buchanan came to write about clubs. From this per- spective, a point of reference is given by Richard Wagner: Buchanan started to discuss the provision and fnancing a local public good— more precisely, a swimming pool—with students in the fall of 1963 (2017, pp.
    [Show full text]
  • Hayek, Institutions, and Coordination: Essays in the History of Economic Thought and Methodology
    1 UNIVERSIDADE DE BRASÍLIA FACULDADE DE ECONOMIA, ADMINISTRAÇÃO, CONTABILIDADE E GESTÃO DE POLÍTICAS PÚBLICAS DEPARTAMENTO DE ECONOMIA PROGRAMA DE PÓS-GRADUAÇÃO EM ECONOMIA Hayek, Institutions, and Coordination: Essays in the History of Economic Thought and Methodology Keanu Telles da Costa Brasília 2020 2 Keanu Telles da Costa Hayek, Institutions, and Coordination: Essays in the History of Economic Thought and Methodology Dissertação apresentada ao Programa de Pós- Graduação em Economia, da Faculdade de Economia, Administração, Contabilidade e Gestão Pública, da Universidade de Brasília como requisito parcial para a obtenção do título de Mestre em Economia. Orientador: Prof. Dr. Mauro Boianovsky Universidade de Brasília Faculdade de Economia, Administração e Contabilidade Departamento de Economia Brasília 2020 3 Keanu Telles da Costa Hayek, Institutions, and Coordination: Essays in the History of Economic Thought and Methodology Dissertação apresentada ao Programa de Pós-Graduação em Economia, da Faculdade de Economia, Administração, Contabilidade e Gestão Pública, da Universidade de Brasília como requisito parcial para à obtenção do título de Mestre em Economia. Orientador: Prof. Dr. Mauro Boianovsky Departamento de Economia, Universidade de Brasília Prof. Dr. Rodrigo Peñaloza Departamento de Economia, Universidade de Brasília Prof. Dr. Fabio Barbieri Departamento de Economia, Universidade de São Paulo – Ribeirão Preto Brasília 2020 4 5 Agradecimentos O motivo principal de minha preferência, e ao final de minha escolha, pelo programa de pós-graduação em Economia da Universidade de Brasília (UnB) se resume na oportunidade de poder partilhar, absorver e trabalhar com a principal referência latino- americana e uma das referências mundiais na área de história do pensamento econômico e metodologia, áreas de meu intenso e juvenil interesse desde os meus anos iniciais de formação.
    [Show full text]
  • Maliye Araştırmaları - 1 Iv
    MALİYE ARAŞTIRMALARI - 1 Editörler: Prof. Dr. Adnan GERÇEK Prof. Dr. Özhan ÇETİNKAYA Bursa – 2017 2017 Ekin Yayınevi Tüm hakları mahfuzdur. Bu kitabın tamamı ya da bir kısmı 5846 Sayılı Yasa’nın hükümlerine göre, kitabı yayınlayan kitapevinin izni olmaksızın elektronik, mekanik, fotokopi ya da herhangi bir kayıt sistemi ile çoğaltılamaz, özetlenemez, yayınlanamaz, depolanamaz. Sertifika No: 0607-16-008681 E-ISBN: 978-605-327-570-1 Dizgi ve Kapak Tasarımı:Prof.Dr. Adnan GERÇEK Yayın Tarihi: Ekim 2017 EKİN Basım Yayın Dağıtım Şehreküştü Mah. Cumhuriyet Cad. Durak Sok. No: 2 Osmangazi / BURSA Tel .: (0.224) 220 16 72 - 223 04 37 Fax.: (0.224) 223 41 12 e-mail: [email protected] www.ekinyayinevi.com Maliye Araştırmaları - 1 iv Sunuş 1985 yılında başlatılan Maliye Sempozyumu, ülkemizin en köklü bilimsel organizasyonlardan birisidir. Onuncu sempozyuma kadar “Maliye Eğitimi Sempozyumu” ve sonraki yıllarda “Türkiye Maliye Sempozyumu” adıyla düzenlenen sempozyum, üniversitelerden akademisyenler ile çeşitli kamu kurumlarından bürokratların bir araya geldikleri ve maliye alanında ön plana çıkan konuları tartıştıkları bir platform haline dönüşmüştür. Günümüzde dünyada düzenlenen sempozyumlar ve kongrelerin şekil değiştirmesiyle birlikte Maliye Sempozyumunun organizasyonunda ve içeriğinde de bazı değişikliklerin yapılması zarureti doğmuştur. Tek konuyu ele alan bir düzenleme yerine maliyenin birçok konusunun eşzamanlı oturumlarda tartışıldığı bir organizasyon haline gelen Maliye Sempozyumu 2017 yılından itibaren “Uluslararası Maliye Sempozyumu / Türkiye” ismini alarak kapılarını uluslararası katılımcılara da açmıştır. Böylece Uluslararası Maliye Sempozyumu / Türkiye, ülkemizdeki akademisyen ve bürokratlar ile dünyanın çeşitli ülkelerindeki maliye bilimi insanlarını bir araya getirerek uluslararası düzeyde işbirliği ve bilgi paylaşımına zemin oluşturmayı ve evrensel bilgi üretimine katkı sağlamayı amaçlamıştır. 32. Uluslararası Maliye Sempozyumu / Türkiye (International public Finance Conference / Turkey) Uludağ Üniversitesi İ.İ.B.F.
    [Show full text]
  • Theories of the Apportionment of the Burden of Taxation
    This dissertation has been 62^3585 microfilmed exactly as received HENDERSON* William Leroy* 1927- THEORIES OF THE APPORTIONMENT OF THE BURDEN OF TAXATION. The Ohio State University* Ph.D.. 1962 Economics* commerce-business University Microfilms, Inc., Ann Arbor, Michigan THEORIES OF THE APPORTIONMENT OF THE BURDEN OF TAXATION DISSERTATION Presented in Partial Fulfillment of the Requirement for the Degree Doctor of Philosophy in the Graduate School of the Ohio State University By William Leroy Henderson, B. Sc., M.A. The Ohio State University 1962 Approved by A dviser Department of Economics ACKNOWLEDGEMENTS The w riter wishes to thank Dr. L. Edwin Smart for his generous assistance at every stage of development of this study. He wishes also to thank Dr. Arthur Lynn and Dr. C. L. James who read the manu­ script and offered valuable suggestions as to both form and content. CONTENTS Page AC KNOWIE DGEMENTS...................................................................................................... i i i Chapter I INTRODUCTION ......................................................................................... 1 Public or Government Finance .......................................... 1 The Nature of Taxes and the Taxing Process . 2 The Bases for the Development of Tax Policy . 3 Justice in Taxation Policy ............................................... 5 Equity in T axation .................................................. 9 The Assignment of Economic Value to the Role of the State ......................................... 10
    [Show full text]
  • Notes and Further Reading
    Notes and Further Reading The literature on the topics covered in this book and that which I consulted during the research for it is voluminous and, in the case of topics in modern economics, often quite technical. The references provided here include the relevant primary sources and important secondary sources, with the latter selected with a general audience in mind. General Reading The History of Economic Thought: A ———. “Pythagorean Mathematical Idealism Backhouse, Roger E. The Ordinary Business Reader, 2nd ed. London: Routledge, 2013. and the Framing of Economic and Political of Life. Princeton, NJ: Princeton University Theory.” Advances in Mathematical Press, 2002. (Outside the U.S., this book There are also several online sources that Economics, vol. 13: 177–199. Berlin: is available as The Penguin History of allow one to access many of the writings Springer, 2010. Economics.) noted in this book—and a wealth of others c. 380 bce, Plato, Aristotle, and the Backhouse, Roger E., and Keith Tribe. The beyond that: Golden Mean History of Economics: A Course for Students The Online Library of Liberty: Aristotle. c. 335 bce. Politics, 2nd ed. Trans. and Teachers. Newcastle Upon Tyne: oll.libertyfund.org Carnes Lord. Chicago: University of Agenda Publishing, 2017. The McMaster University Archive for Chicago Press, 2013. Blaug, Mark. Economic Theory in Retrospect, the History of Economic Thought: ———. c. 340 bce. Nicomachean Ethics. 5th ed. Cambridge: Cambridge University socialsciences.mcmaster.ca/econ/ Trans. Robert C. Bartlett and Susan D. Press, 1996. ugcm/3ll3/ Collins. Chicago: University of Chicago Heilbroner, Robert L. The Worldly JSTOR: jstor.org. Press, 2012.
    [Show full text]
  • Musgrave, Samuelson, and the Crystallization of the Standard Rationale for Public Goods
    Musgrave, Samuelson, and the crystallization of the standard rationale for public goods Maxime Desmarais-Tremblay1 Abstract This paper provides a narrative of the emergence of the standard textbook definition of public goods. It focuses on Richard A. Musgrave’s contribution in defining public goods as non-rival and non-excludable—from 1937 to 1973. Although Samuelson’s mathematical definition is generally used in models of public goods, the qualitative understanding of the specificity of pure public goods owes a lot to Musgrave. I argue that the evolution of Musgrave’s writings on public goods reflects his intention to Justify his view of the role of the state in providing goods and services to the citizens with an argument that would be convincing to the community of American economists in the middle of the twentieth century. Musgrave’s definition highlights his life-long concern for a comprehensive, realistic and useful normative theory of the public sector. Keywords: Richard A. Musgrave; Paul A. Samuelson; social goods; public goods; non-rivalry; non- exclusion; free riding. JEL Codes: H41, B29, B31 1 [email protected]. Centre Walras-Pareto, Université de Lausanne, IEPHI Geopolis, 1015 Lausanne, Switzerland and Centre d’Économie de la Sorbonne, Université Paris I Panthéon-Sorbonne. An earlier version of this paper (Desmarais-Tremblay 2013) was presented at the 17!" ESHET annual Conference in Kingston (May 2013) and at the 14!" Summer Institute for the History of Economic Thought at the University of Richmond (June 2013). More recent versions were presented at the HPPE seminar at LSE (January 2015), at the Albert O.
    [Show full text]
  • Justifying the Lindahl Solution As an Outcome of Fair Cooperation
    JUSTIFYING THE LINDAHL SOLUTION AS AN OUTCOME OF FAIR COOPERATION WOLFGANG BUCHHOLZ WOLFGANG PETERS CESIFO WORKING PAPER NO. 1536 CATEGORY 1: PUBLIC FINANCE SEPTEMBER 2005 An electronic version of the paper may be downloaded • from the SSRN website: www.SSRN.com • from the CESifo website: www.CESifo-group.de CESifo Working Paper No. 1536 JUSTIFYING THE LINDAHL SOLUTION AS AN OUTCOME OF FAIR COOPERATION Abstract The Lindahl equilibrium is mostly motivated by a rather artificial price mechanism. Even though the analogy to a competitive market has been emphasised by Lindahl himself his approach does not directly explain the normative ideas, which are behind this concept. In the present paper we therefore show how the Lindahl equilibrium can be deduced from some simple equity axioms that in particular are related to the equal sacrifice principle and a non- envy postulate as norms for distributional equity. Fairness among agents with different preferences is taken into account by considering their marginal willingnesses to pay as virtual prices. In this way it might also become more understandable why the Lindahl solution can be perceived as an outcome of fair cooperation. JEL Code: C78, D63, H41. Keywords: public goods, Lindahl equilibrium, fairness, equity. Wolfgang Buchholz Wolfgang Peters Department of Economics Department of Economics University of Regensburg European University Viadrina 93040 Regensburg Postfach 1786 Germany 15207 Frankfurt (Oder) [email protected] Germany [email protected] A preliminary version of this paper has been presented at seminars at the Universities of Chemnitz and Linz. We thank the participants of these seminars for their helpful comments.
    [Show full text]
  • On the Definition of Public Goods. Assessing Richard A. Musgrave's
    On the Definition of Public Goods. Assessing Richard A. Musgrave’s contribution Maxime Desmarais-Tremblay To cite this version: Maxime Desmarais-Tremblay. On the Definition of Public Goods. Assessing Richard A. Musgrave’s contribution. 2014. halshs-00951577 HAL Id: halshs-00951577 https://halshs.archives-ouvertes.fr/halshs-00951577 Submitted on 25 Feb 2014 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. Documents de Travail du Centre d’Economie de la Sorbonne On the Definition of Public Goods Assessing Richard A. Musgrave’s contribution Maxime DESMARAIS-TREMBLAY 2014.04 Maison des Sciences Économiques, 106-112 boulevard de L'Hôpital, 75647 Paris Cedex 13 http://centredeconomiesorbonne.univ-paris1.fr/bandeau-haut/documents-de-travail/ ISSN : 1955-611X On the Definition of Public Goods Assessing Richard A. Musgrave’s contribution Maxime Desmarais-Tremblay∗ Abstract This paper provides an explanation of the emergence of the standard text- book definition of public goods in the middle of the 20th century. It focuses on Richard Musgrave’s contribution in defining public goods as non-rival and non-excludable – from 1939 to 1969. Although Samuelson’s mathematical definition is generally used in models of public goods, the qualitative un- derstanding of the specificity of pure public goods owes more to Musgrave’s emphasis on the impossibility of exclusion.
    [Show full text]
  • Tax Policy from a Public Choice Perspective Randall G
    SYMPOSIUM ON PUBLIC CHOICE TAX POLICY FROM A PUBLIC CHOICE PERSPECTIVE RANDALL G. HOLCOMBE * Abstract - Tax policy is a product of product of politics, one must under- politics, so a complete understanding of stand the political process to completely tax policy requires an explicit recogni- understand the tax system. Furthermore, tion of the political environment within if the tax structure is designed appropri- which tax policy is made. The paper ately, the collective choice process can emphasizes the concept of political costs provide a revealed preference mecha- associated with the tax system and nism that can help enhance the effi- discusses several aspects of tax policy ciency of government both on the tax using a public choice approach. The side and the expenditure side of the paper argues that the political costs ledger. Also, public choice analysis associated with taxation can be mini- might lend some insight into what mized by embedding the tax system constitutes an equitable tax structure. within a relatively inflexible fiscal The analysis that follows begins with the constitution. Despite the insights the recognition that the political system uses public choice perspective offers, most resources to design tax systems, and analysis of tax policy does not take these costs should be taken into public choice considerations into account along with other welfare costs account. of the tax system. The advice of economists has had a substantial impact on the tax structure both in the United States and world- wide. However, tax policy is the product Despite the fact that the tax structure is of political decision making, with a product of the political process, rarely economic analysis playing only a does an economic analysis of tax policy supporting role.
    [Show full text]
  • The Collected Works of James M. Buchanan Volume 4 Public Finance
    The Collected Works of James M. Buchanan volume 4 Public Finance in Democratic Process James M. Buchanan with portrait of Knut Wicksell, Stockholm, Sweden, 1986 The Collected Works of James M. Buchanan volume 4 Public Finance in Democratic Process Fiscal Institutions and Individual Choice liberty fund Indianapolis This book is published by Liberty Fund, Inc., a foundation established to encourage study of the ideal of a society of free and responsible individuals. The cuneiform inscription that serves as our logo and as the design motif for our endpapers is the earliest-known written appearance of the word ‘‘freedom’’ (amagi), or ‘‘liberty.’’ It is taken from a clay document written about 2300 b.c. in the Sumerian city-state of Lagash. Foreword ᭧ 1999 by Liberty Fund, Inc. ᭧ 1967, 1987 The University of North Carolina Press All rights reserved Printed in the United States of America 05 04 03 02 01 c 65432 04 03 02 01 99 p 54321 Library of Congress Cataloging-in-Publication Data Buchanan, James M. Public finance in democratic process : fiscal institutions and individual choice / James M. Buchanan. p. cm. — (Collected works of James M. Buchanan ; v. 4) Originally published: Chapel Hill : University of North Carolina Press, 1967. Includes bibliographical references (p. ) and index. isbn 0-86597-219-2 (hard : alk. paper). — isbn 0-86597-220-6 (pbk. : alk. paper) 1. Public goods. 2. Social choice. 3. Finance, Public. 4. Fiscal policy. 5. Democracy. I. Title. II. Series: Buchanan, James M. Works. 1999 ; v. 4. hj193.b833 1999 336—dc21 98-43535 liberty fund, inc. 8335 Allison Pointe Trail, Suite 300 Indianapolis, IN 46250-1684 Contents Foreword ix Preface xiii I.
    [Show full text]
  • The Great Schism in the Theory of Public Finance. a Treatise in the Theory of Economic Thought
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Blankart, Charles B: Conference Paper The Great Schism in the Theory of Public Finance. A Treatise in the Theory of Economic Thought Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Dynamic Public Finance, No. B03-V1 Provided in Cooperation with: Verein für Socialpolitik / German Economic Association Suggested Citation: Blankart, Charles B: (2014) : The Great Schism in the Theory of Public Finance. A Treatise in the Theory of Economic Thought, Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Dynamic Public Finance, No. B03-V1, ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz- Informationszentrum Wirtschaft, Kiel und Hamburg This Version is available at: http://hdl.handle.net/10419/100461 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte.
    [Show full text]