Should the Government Finance Public Goods in Rural Areas? A Review of Arguments

This paper reviews three arguments why government should not directly finance public goods provision in the countryside: (1) sorting and voting of residents leads to efficient local public goods provision, (2) community governance better copes with incomplete contracting in public goods, and (3) public provision drives out voluntary private provi-sion of public goods. Theory and empirical evidence partly support these arguments. The adequate level of rural governance appears to be often below the national or Euro-pean level, and policy should focus on the institutional premises of public goods provi-sion rather than on centralized payments to public good providers.


Subject(s):
Issue Date:
2006
Publication Type:
Working or Discussion Paper
Record Identifier:
http://ageconsearch.umn.edu/record/12594
PURL Identifier:
http://purl.umn.edu/12594
Total Pages:
23
Series Statement:
Staff Paper Series No. 497




 Record created 2017-04-01, last modified 2018-01-22

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)