INCENTIVES TO SUPPORT THE PUBLIC SECOTR UNDER OLIGOPOLY

We analyse a simple economy with a consumption good, an intermediate good and a public good, where there are capitalists, shop-keepers and worker. It follow that the capitalists and the shop-keepers would always vote for a lower tax rate than the workers although preferences are identical. No group would support a larger public sector than in the first-best solution under free entry and exit among the shop-keepers. A low tax rate would increase the number of supporters of low taxes and vice versa.


Issue Date:
Sep 09 1992
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/268517
Language:
English
Total Pages:
26




 Record created 2018-02-16, last modified 2020-10-28

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