In Chapter 8, we suggested that general taxation is an efficient revenue-raising institution in majoritarian democracy. We did not explicitly relate the analysis to the outlay or spending side of the fiscal account. Implicitly, however, the presumption was that revenues raised by taxes are devoted to the financing of public or collective consumption goods and services, which, as provided, are available to all members of the political community. That is to say, the analysis of tax alternatives proceeded on the presumption that spending benefits are, themselves, general in this publicness or availability sense. Individual evaluations of publicly financed goods and services may, of course, differ widely, but the stylized model, as examined, involved no explicit politically determined differentiation among beneficiaries. As in the simple exercises of earlier chapters, the classic example is David Hume's meadow that needs to be drained to the prospective benefit of all adjacent farmers. The subject matter to be examined in this chapter includes other types of government services as well. We propose to analyze the workings of majoritarian politics in a constitutional setting that allows government spending that is not limited to the financing of technologically defined public goods but is directed also to the financing and production of goods and services that may be partitioned among separate users. We hold off analysis of direct monetary transfers until Chapter 11.

There are many distinctions between an individual's effective demand for services acquired via market exchange transactions and goods and services that may be acquired through governmental–political auspices.