Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/47178
Authors: 
Paqué, Karl-Heinz
Year of Publication: 
1984
Series/Report no.: 
Kiel Working Paper 202
Abstract: 
Until recently the concept of tax expenditures has been exclusively analyzed along traditional Pigouvian lines. Broadly speaking, the introduction of tax/subsidy-schemes was considered to be justified whenever large number externalities prevent the market from working efficiently. This approach - while fruitful and important in its own right - neglects a fundamental policy problem, namely the public choice option between tax expenditures and direct government spending: independent of any welfare theoretic rationale for public intervention, there remains the question which kind of intervention - tax expenditure (implicit subsidization) or direct expenditure - is the most efficient solution.
Document Type: 
Working Paper

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