Static and dynamic (in)efficiency in public goods provision
Riccarda Arianna Longaretti2015, Economics Letters
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Abstract
h i g h l i g h t s • We develop a theoretical model with heterogeneous agents that differ in income. • We focus on two alternative public choice mechanisms. • We show that static inefficiency depends on the public choice mechanism. • We show that it depends also on the income elasticity of the public good. • We show that a trade-off may be at work between static and dynamic (in)efficiency.
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