Degrees of Rivalry and Excludability
The simple taxonomy of goods oversimplifies when it treats rivalry and excludability as dichotomous yes no alternatives. Rivalry and excludability are rarely absolute but are usually a matter of degree Holcombe, 1996, p. 100 Ulbrich, 2003, p. 71 . Figure 5.1 Revised taxonomy of goods with degrees of rivalry and excludability. Some economists Holcombe, 1996, p. 110 Stiglitz, 2000, p. 133 Hyman, 2002, p. 143 visualize characteristics such as rivalry and excludability as continua, with varying...
Optimal Jurisdictional Size
For each public good or service, there exists an optimal size of government for the provision of the good or service Oates, 1972, 31-53 Fisher, 1988, 87-88 . When a nonrival public good or service is consumed jointly, the per capita cost of the good decreases as the number of consumers increases. Figure 2.1 illustrates the cost savings realized by increasing the number of citizens consuming a joint good or service with the curve OC. In cases where the governmental jurisdiction is Figure 2.1...
Theories of Grant Utilization
Economic theory can help illuminate when and where a specific characteristic of a grant is most useful and appropriate. Lump-sum and matching grants tend to produce different incentives for grant recipients. The effects of lump-sum and matching intergovernmental grants on the recipient government's decision making are influenced by two factors the income effect and the substitution effect. The additional income from a lump-sum grant will cause the demand curve to shift out as shown in Figure...
Discussion Questions
1. Some people have suggested that political voting and voting with one's feet simultaneously apply in determining the amounts of local public services to provide. Discuss how this might happen. How might the limitations of the assumptions of the Tiebout model contribute to a role for voting 2. What are the five assumptions of voting models Briefly discuss possible outcomes if these assumptions are violated. 3. What is rational ignorance What are its ramifications How can platforms and other...
Introduction Frx
In American culture the term bureaucracy has a very negative connotation. I asked a class of undergraduate students to use one word to describe bureaucracy. Their responses included waste, inefficiency, red tape, rules, paperwork, formality, unresponsiveness, idleness, and rigidity. These negative descriptions of bureaucracy are not limited to students. This animosity towards the bureaucracy is deeply rooted in American culture. It even extends to the American cinema Lee and Paddock, 2001 . It...
Precursors to Keynes
Although Keynes made important contributions to economics, there was considerable interest in macroeconomics before his major work, The General Theory of Employment, Interest, and Money, written in 1936. Of particular importance was the work of Leontief, a great number of business cycle theorists, and what came to be known as the Stockholm School. Wassily Leontief 1906-1999 is the father of modern input-output analysis, which maps the flow of goods from one industry into the next, incorporating...
Preface
The Handbook of Public Sector Economics is first and foremost a textbook for graduate students in public administration and public policy. Although most handbooks are used as reference texts, this particular handbook was proposed and written as a textbook to be used as the primary book in a graduate public economics course or an important secondary or supplementary book in a public finance or public policy course in a program where a course in public economics is not offered. The primary goal...
THE MARGINALIST REVOLUTION 131 Whys and Wherefores
A major shift in the paradigm of economics occurred in the 1870s. Blaug 2002 has questioned whether the marginalist revolution was, in fact, a revolution, given the number of political economists who proposed a utility-based or margin-alist-infused theory of value long before the 1870s and given the long time for the marginalist revolution to gain general acceptance. Nevertheless, over time, the labor theory of value was eased out and a subjective theory of value was introduced, becoming a part...
Contributors
John R. Bartle is a professor in the School of Public Administration at the University of Nebraska at Omaha. He teaches and does research in the areas of public finance policy and management, public budgeting, applied economics, and transportation. He has been published in a number of journals including Public Budgeting amp Finance, State and Local Government Review, and Journal of Public Administration Research and Theory, and he is the editor of the book Evolving Theories of Public Budgeting...