Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80195
Authors: 
Kolmar, Martin
Year of Publication: 
2001
Series/Report no.: 
Working Paper, Brown University, Department of Economics 2002-03
Abstract: 
In this paper we analyze the optimal degree of centralization for the supply of public goods. We identify the reliance on an exclusion mechanism as a central feature of the decentralized provision of public goods. An exclusion mechanism induces a contest between users of the public goods who want to free ride and the providers who want to exclude free riding. This contest explains the costs of decentralization. A centralized contribution does not rely on an exclusion mechanism to finance the public goods but on taxation which induces different types of transaction costs. A comparison of the relevant distortions explains the optimal degree of centralization of the supply of public goods.
Subjects: 
Public Goods
Club Goods
Contests
Fiscal Federalism
JEL: 
D74
H41
H70
K42
Document Type: 
Working Paper

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