The Demand and Supply of Public Goods: Supplementary Reading Materials

The Demand and Supply of Public Goods
(ebookdem.html)

		Metadata
		Forward
		Preface
		Chapter 1:A Methodological Introduction
		Chapter 2:Simple Exchange in a World of Equals
		Chapter 3:Simple Exchange in a World of Unequals
		Chapter 4:Pure and Impure Public Goods
		Chapter 5:Many Private Goods, Many Persons
		Chapter 6: Many Public Goods, Many Persons
		Chapter 7:The Publicness of Political Decisions
		Chapter 8:The Institutions of Fiscal Choice
		Chapter 9:Which Goods Should Be Public
		Chapter 10:Toward a Positive Theory of Public Finance
		Supplementary Reading Materials

Supplementary Reading Materials

In the Preface I noted that this book represents a written version of discussions carried on over a decade in my graduate seminar at the University of Virginia. An appropriate addition to the text may be a listing of reading materials that students in the seminar were assigned as supplementary to the discussion. These are indicated below. Note that some general material is included in this listing that is not contained in the specific references to the literature at the end of the earlier chapters of the book. Similarly, note also that some of the more specific references included in the bibliographical appendices are not included in this general listing.

BOOKS

American Economic Association, Readings in the Economics of Taxation, edited by R. A. Musgrave and C. Shoup (Homewood: Richard D. Irwin, 1959).

Kenneth J. Arrow, Social Choice and Individual Values (New York: John Wiley and Sons, 1951; Revised edition, 1963).

William J. Baumol, Welfare Economics and the Theory of the State (Cambridge: Harvard University Press, 1952; Revised second edition, 1965).

Duncan Black, The Theory of Committees and Elections (Cambridge: Cambridge University Press, 1958).

Duncan Black and R. A. Newing, Committee Decisions with Complementary Valuation (London: William Hodge, 1951).

Howard Bowen, Toward Social Economy (New York: Rinehart, 1948), pt. IV.

James M. Buchanan, Fiscal Theory and Political Economy (Chapel Hill: University of North Carolina Press, 1960).

, Public Finance in Democratic Process (Chapel Hill: University of North Carolina Press, 1967).

James M. Buchanan and Gordon Tullock, The Calculus of Consent (Ann Arbor: University of Michigan Press, 1962).

Anthony Downs, An Economic Theory of Democracy (New York: Harper, 1957).

J. de V. Graaf, Theoretical Welfare Economics (Cambridge: Cambridge University Press, 1957).

International Economic Association, Classics in the Theory of Public Finance, edited by R. A. Musgrave and A. T. Peacock (London: Macmillan, 1958).

R. A. Musgrave, The Theory of Public Finance (New York: McGraw-Hill, 1959).

Mancur Olson, The Logic of Collective Action (Cambridge: Harvard University Press, 1965).

MONOGRAPHS

M. Z. Kafoglis, Welfare Economics and Subsidy Programs, University of Florida Monographs in Social Science, No. 11, Summer 1961.

Charles Plott, Generalized Equilibrium Conditions Under Alternative Exchange Institutions, Research Monograph No. 9, Thomas Jefferson Center for Political Economy, University of Virginia, December 1964.

Earl Thompson, The Perfectly Competitive Allocation of Collective Goods, MR-49, Institute of Government and Public Affairs, University of California, Los Angeles, September 1965.

ARTICLES

James M. Buchanan and Milton Z. Kafoglis, "A Note on Public Goods Supply," American Economic Review, LIII (June 1963), 403-14.

James M. Buchanan and Gordon Tullock, "Public and Private Action Under Reciprocal Externality," in The Public Economy of Urban Communities, edited by J. Margolis (Resources for the Future, 1965).

Otto A. Davis and Andrew Whinston, "Some Foundations of Public Expenditure Theory," Mimeographed. Carnegie Institute of Technology, November 1961.

J. G. Head, "Public Goods and Public Policy," Public Finance, XVII (No. 3, 1962), 197-221.

, "Lindahl's Theory of the Budget," Finanzarchiv, XXIII (October 1964), 421-54.

, "The Welfare Foundations of Public Finance Theory," Rivista di diritto finanziario e scienza delle finanze (May 1965), 3-52.

, "On Merit Goods," Finanzarchiv, XXV (March 1966), 1-29.

Leif Johansen, "Some Notes on Lindahl's Theory of Determination of Public Expenditures," International Economic Review, IV (September 1963), 346-58.

Paul A. Samuelson, "The Pure Theory of Public Expenditure," Review of Economics and Statistics, XXXVI (November 1954), 387-89.

, "Diagrammatic Exposition of a Theory of Public Expenditure," Review of Economics and Statistics, XXXVII (November 1955), 350-56.

, "Aspects of Public Expenditure Theories," Review of Economics and Statistics, XL (November 1958), 332-37.

, "Pure Theory of Public Expenditure and Taxation," Mimeographed, July 1966.

Robert H. Strotz, "Two Propositions Related to Public Goods," Review of Economics and Statistics, XL (November 1958), 329-31.

James M. Buchanan, Collected Works
The Demand and Supply of Public Goods
NOTES

Foreword

1. Paul A. Samuelson, "The Pure Theory of Public Expenditure," Review of Economics and Statistics 36 (November 1954): 387-89; "Diagrammatic Exposition of a Theory of Public Expenditure," Review of Economics and Statistics 37 (November 1955): 350-56; and "Aspects of Public Expenditure Theories," Review of Economics and Statistics 40 (November 1958): 332-38. James M. Buchanan, The Limits of Liberty: Between Anarchy and Leviathan (Chicago: University of Chicago Press, 1975), volume 7 in the series.

2. James M. Buchanan and W. C. Stubblebine, "Externality," Economica 29 (November 1962): 371-84; James M. Buchanan, "An Economic Theory of Clubs," Economica 32 (February 1965): 1-14. Both papers are included in volume 15 in the series, Externalities and Public Expenditure Theory. James M. Buchanan, The Demand and Supply of Public Goods (Chicago: Rand-McNally, 1968), volume 5 in the series. Samuelson, "The Pure Theory," 387-89; "Diagrammatic Exposition," 350-56; and "Expenditure Theories," 332-38; Richard A. Musgrave, The Theory of Public Finance (New York: McGraw-Hill, 1959). John G. Head, Public Goods and Public Welfare (Durham: Duke University Press, 1974).

3. Buchanan, Limits of Liberty, 1975, volume 7 in the series.

4. Richard A. Musgrave, "The Voluntary Exchange Theory of Public Economy," Quarterly Journal of Economics 53 (February 1939): 213-37; Erik Lindahl, Die Gerechtigkeit der Besteuerung (Lund: Gleerupska Universitets-Bokhandeln, 1919); Knut Wicksell, Finanztheoretische Untersuchungen (Jena: Fischer, 1896).

Chapter 2

5. This model differs from that discussed in connection with Figure 2.1 because of our neglect of income effects here.

Chapter 4

6. This statement suggests one important aspect of public-goods supply that may have been overlooked by some scholars. The theory of public goods can be applied even in those cases where congestion arises in the usage of a public facility. A road, street or highway provides the best illustration of this point. The facility, once constructed, is made equally available to all users, and the theory of public goods can be used to determine, conceptually, the appropriate extension in the capacity of the facility. Each facility embodies, however, a certain congestion probability as one of its physical dimensions, and this will be taken into account in the individual marginal evaluations. For example, an individual will place a different marginal evaluation on a toll-free, congested thoroughfare than on a toll-charging, noncongested throughway of the same physical attributes. Even in the toll-charging case, however, the facility is equally available to all potential users.

7. Under the restricted assumption of linearity in the two cost functions under separate production, the convexity of the iso-cost contours implies net efficiency in joint production. If, however, this linearity assumption is dropped, convex iso-cost contours may exist even where there is no jointness advantage. For this more general model, a redefinition of quantity units in terms of dollars of cost is required to convert the independent-production cost functions into effectively linear form. Once this step is taken, the analysis proceeds as it does in the simpler model.

Chapter 5

Chapter 6

8. The set of points that qualify as Pareto-optimal meet the same general conditions in the two-person and the three-person cases. Any point outside this set is dominated by at least one point in the set for all persons, and no point inside the set dominates any other point in the set for all persons. These conditions may be stated differently by reference to potential moves among points. From any nonoptimal point, there must exist at least one means of shifting to a point in the optimal set of points in such a way that at least one person is benefited and no one is harmed. In other words, it must be possible to shift from any nonoptimal point to some optimal point in a Pareto-optimal manner. Once a point within the Pareto set is attained, however, any shift must harm at least one person; no Pareto-optimal moves can be made.

Chapter 7

Chapter 8

Chapter 9

9. This chapter is not well integrated with the other parts of this book, and earlier attempts to locate the material elsewhere in the manuscript were not successful. Although the analysis builds on the models previously discussed, a new question is introduced which cannot be adequately explored in all of its complexities. Despite this acknowledged incompleteness, I have decided to include the chapter because of its relevance for the interpretations that many scholars, correctly or incorrectly, have placed on the modern theory of public goods, and finally, because of the fundamental and general interest of the question itself.

10. This is an important and necessary qualification. For goods and services exhibiting publicness over large groups (and inoculations may be excellent examples here) the way in which any available quantity is distributed may affect the degree and extent of spillover benefits generated. This is only one type of difficulty that is likely to be encountered in any attempt to classify goods and services by criteria that are inherent in the descriptive characteristics of the goods themselves.

End of Notes