Book contents
- Frontmatter
- Contents
- Preface
- Acknowledgments
- Part I The Formative Years
- Part II Institutions and Market Performance
- Part III Public Goods
- Introduction
- 20 The Principle of Unanimity and Voluntary Consent in Social Choice
- 21 Incentive Compatible Experimental Processes for the Provision of Public Goods
- 22 An Experimental Comparison of Three Public Good Decision Mechanisms
- 23 Experiments with a Decentralized Mechanism for Public Good Decisions
- 24 Experimental Tests of an Allocation Mechanism for Private, Public or Externality Goods
- Part IV Auctions and Institutional Design
- PART V Industrial Organization
- Part VI Perspectives on Economics
21 - Incentive Compatible Experimental Processes for the Provision of Public Goods
Published online by Cambridge University Press: 06 July 2010
- Frontmatter
- Contents
- Preface
- Acknowledgments
- Part I The Formative Years
- Part II Institutions and Market Performance
- Part III Public Goods
- Introduction
- 20 The Principle of Unanimity and Voluntary Consent in Social Choice
- 21 Incentive Compatible Experimental Processes for the Provision of Public Goods
- 22 An Experimental Comparison of Three Public Good Decision Mechanisms
- 23 Experiments with a Decentralized Mechanism for Public Good Decisions
- 24 Experimental Tests of an Allocation Mechanism for Private, Public or Externality Goods
- Part IV Auctions and Institutional Design
- PART V Industrial Organization
- Part VI Perspectives on Economics
Summary
After providing… [public expenditure] … theory with its… optimal conditions, I went on to demonstrate the fatal inability of any decentralized market or voting mechanism to attain or compute this optimum
[Samuelson, (1955), p. 35].… to say that market mechanisms are non-optimal, and that there are difficulties with most political decision processes, does not imply that we can never find new mechanisms of a better sort
[Samuelson (1958), p. 334].Providing the [public] expenditure in question holds out any prospect at all of creating utility exceeding costs, it will always be theoretically possible, and approximately so in practice, to find a distribution of costs such that all parties regard the expenditure as beneficial and may therefore approve it unanimously
[Wicksell (1896), pp. 89-90].How much of this [the principle of unanimity and voluntary consent in taxation] … may be of practical use in the near future, men of affairs may decide
[Wicksell (1896), p. 73].INTRODUCTION
The theory of public goods has, in the space of 20 years, revolutionized teaching and research in public finance, had a major impact on the content of microeconomic theory in general, and has provided, for many, the analytical foundation for an economic justification for the state. The most widely accepted proposition in contemporary public finance is the “fatal inability” of decentralized market or voting institutions to attain a Pareto-optimal allocation of resources when there are public goods.
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- Papers in Experimental Economics , pp. 392 - 455Publisher: Cambridge University PressPrint publication year: 1991
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