The efficient provision of public goods through non-distortionary tax contests

Giebe, Thomas and Schweinzer, Paul (March 2011): The efficient provision of public goods through non-distortionary tax contests. SFB/TR 15 Discussion Paper No. 352

Abstract

We use a simple balanced budget contest to collect taxes on a private good in order to ?nance a pure public good. We show that-with an appropriately chosen structure of winning probabilities-this contest can provide the public good efficiently and without distorting private consumption. We provide extensions to multiple public goods and private taxation sources, asymmetric preferences, and show the mechanism’s robustness across these settings.

• Item Type: Paper
• Keywords: Taxation, Contests, Efficiency
• Faculties: Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems; Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > A7 - Auktionen, Anreizprobleme und Wettbewerb
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: C7, D7
• Language: English