On the private provision of public goods
TL;DR: In this article, the authors consider a general model of non-cooperative provision of a public good and show that there is always a unique Nash equilibrium in the model and characterize the properties and the comparative statics of the equilibrium.
About: This article is published in Journal of Public Economics.The article was published on 1986-02-01 and is currently open access. It has received 2237 citations till now. The article focuses on the topics: Public good & Public goods game.
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TL;DR: In this paper, the invariance proposition of public goods and the optimal tax treatment of charitable giving are discussed. And the authors show that impure altruism is more consistent with observed patterns of giving than the conventional pure altruism approach, and has policy implications that may differ widely from those of the conventional models.
Abstract: When people make donations to privately provided public goods, such as charity, there may be many factors influencing their decision other than altruism. Social pressure, guilt, sympathy, or simply a desire for a "warm glow" may all be important. This paper considers such impure altruism formally and develops a wide set of implications. In particular, this paper discusses the invariance proposition of public goods, solves for the sufficient conditions for neutrality to hold, examines the optimal tax treatment of charitable giving, and calibrates the model based on econometric studies in order to consider policy experiments. Impure altruism is shown to be more consistent with observed patterns of giving than the conventional pure altruism approach, and to have policy implications that may differ widely from those of the conventional models. Copyright 1990 by Royal Economic Society.
5,139 citations
TL;DR: The authors formally developed a model of giving in which altruism is not "pure." In particular, people are assumed to get a "warm glow" from giving, and this model generates identifiable comparative statics results that show that crowding out of charity is incomplete and that government debt will have Keynesian effects.
Abstract: Models of giving have often been based on altruism. Examples include charity and intergenerational transfers. The literatures on both subjects have centered around neutrality hypotheses: charity is subject to complete crowding out, while intergenerational transfers are subject to Ricardian equivalence. This paper formally develops a model of giving in which altruism is not "pure." In particular, people are assumed to get a "warm glow" from giving. Contrary to the previous literature, this model generates identifiable comparative statics results that show that crowding out of charity is incomplete and that government debt will have Keynesian effects.
3,028 citations
TL;DR: In this paper, the authors introduce the separate spheres bargaining model, a new model of distribution within marriage, which differs from divorce threat bargaining models (e.g., Manser-Brown, McElroy-Horney) in that the threat point is not divorce but a non-cooperative equilibrium within marriage.
Abstract: This paper introduces the "separate spheres" bargaining model, a new model of distribution within marriage. It differs from divorce threat bargaining models (e.g., Manser-Brown, McElroy-Horney) in that the threat point is not divorce but a noncooperative equilibrium within marriage; this noncooperative equilibrium reflects traditional gender roles. The predictions of our model thus differ from those of divorce threat bargaining models; in the separate spheres model, cash transfer payments to the mother and payments to the father can--but need not--imply different equilibrium distributions in existing marriages. In the long run, the distributional effects of transfer policies may be substantially altered by changes in the marriage market equilibrium.
1,559 citations
TL;DR: In this article, the conceptual and empirical foundations of community-based and driven development (CBD) initiatives are reviewed, and the authors find that projects that rely on community participation have not been particularly effective at targeting the poor.
Abstract: Community-based (and driven) development (CBD) projects have become an important form of development assistance, with the World Bank's portfolio alone approximating 7 billion dollars. This paper reviews the conceptual and empirical foundations of CBD/CDD initiatives. Given the importance of the topic, there are, unfortunately, a dearth of well-designed evaluations of such projects. There is, however, enough quantitative and qualitative evidence, from studies that have either been published in peer-reviewed publications or have been conducted by independent researchers, to gain some instructive lessons. We find that projects that rely on community participation have not been particularly effective at targeting the poor. There is some evidence that CBD/CDD projects create effective community infrastructure, but not a single study establishes a causal relationship between any outcome and participatory elements of a CBD project. Most CBD projects are dominated by elites and, in general, the targeting of poor communities as well as project quality tend to be markedly worse in more unequal communities. However, a number of studies find a U shaped relationship between inequality and project outcomes. We also find that a distinction between potentially 'benevolent' forms of elite domination and more pernicious types of 'capture' is likely to be important for understanding project dynamics and outcomes. Several qualitative studies indicate that the sustainability of CBD initiatives depends crucially on an enabling institutional environment, which requires upward commitment. Equally, the literature indicates that community leaders need to be downwardly accountable to avoid a variant of 'supply driven demand driven development'. Qualitative evidence also suggests that external agents strongly influence project success. However, facilitators are often poorly trained and inexperienced, particularly when programs are rapidly scaled up. Overall, a naive application of complex contextual concepts like 'participation', 'social capital' and 'empowerment' - is endemic among project implementers and contributes to poor design and implementation. In sum, the evidence suggests that CBD/CDD is best done in a context-specific manner, with a long time-horizon, and with careful and well designed monitoring and evaluation systems.
1,306 citations
TL;DR: The authors applied the standard neoclassical economic framework to generate predictions about how rational agents would answer such survey questions, which in turn implies how such survey data should be interpreted, and compared different survey formats with respect to the information that the question itself reveals to the respondent, the strategic incentives the respondent faces in answering the question, and the information revealed by the respondent's answer.
Abstract: Surveys are frequently used by businesses and governments to elicit information about the public’s preferences. They have become the most common way to gather preference information regarding goods, that are not (or are not yet) bought or sold in markets. In this paper we apply the standard neoclassical economic framework to generate predictions about how rational agents would answer such survey questions, which in turn implies how such survey data should be interpreted. In some situations, the standard economic model would be expected to have no predictive power. For situations where it does have predictive power, we compare different survey formats with respect to: (a) the information that the question itself reveals to the respondent, (b) the strategic incentives the respondent faces in answering the question, and (c) the information revealed by the respondent’s answer.
1,222 citations
References
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Book•
01 Jan 1981
TL;DR: The Enlarged Edition as mentioned in this paper provides an overview of the evolution of the family and the state Bibliography Index. But it does not discuss the relationship between fertility and the division of labor in families.
Abstract: Preface to the Enlarged Edition Introduction 1. Single-Person Households 2. Division of Labor in Households and Families Supplement: Human Capital, Effort, and the Sexual Division of Labor 3. Polygamy and Monogamy in Marriage Markets 4. Assortative Mating in Marriage Markets 5. The Demand for Children Supplement: A Reformulation of the Economic Theory of Fertility 6. Family Background and the Opportunities of Children 7. Inequality and Intergenerational Mobility Supplement: Human Capital and the Rise and Fall of Families 8. Altruism in the Family 9. Families in Nonhuman Species 10. Imperfect Information, Marriage, and Divorce 11. The Evolution of the Family Supplement: The Family and the State Bibliography Index
9,096 citations
TL;DR: In this article, the authors consider the effects of different types of intergenerational transfer schemes on the stock of public debt in the context of an overlapping-generations model and show that finite lives will not be relevant to the capitalization of future tax liabilities so long as current generations are connected to future generations by a chain of operative inter-generational transfers.
Abstract: The assumption that government bonds are perceived as net wealth by the private sector is crucial in demonstrating real effects of shifts in the stock of public debt. In particular, the standard effects of "expansionary" fiscal policy on aggregate demand hinge on this assumption. Government bonds will be perceived as net wealth only if their value exceeds the capitalized value of the implied stream of future tax liabilities. This paper considers the effects on bond values and tax capitalization of finite lives, imperfect private capital markets, a government monopoly in the production of bond "liquidity services," and uncertainty about future tax obligations. It is shown within the context of an overlapping-generations model that finite lives will not be relevant to the capitalization of future tax liabilities so long as current generations are connected to future generations by a chain of operative intergenerational transfers (either in the direction from old to young or in the direction from young to old). Applications of this result to social security and to other types of imposed intergenerational transfer schemes are also noted. In the presence of imperfect private capital markets, government debt issue will increase net wealth if the government is more efficient, at the margin, than the private market in carrying out the loan process. Similarly, if the government has monopoly power in the production of bond "liquidity services," then public debt issue will raise net wealth. Finally, the existence of uncertainty with respect to individual future tax liabilities implies that public debt issue may increase the overall risk contained in household balance sheets and thereby effectively reduce household wealth.(This abstract was borrowed from another version of this item.)
5,762 citations
TL;DR: In this article, closely related experiments testing the free rider hypothesis under different conditions, and sampling various sub-populations, are reported, and results question the empirical validity and generality of a strong version of the hypothesis.
1,118 citations
TL;DR: When a single public good is provided at positive levels by private individuals, its provision is unaffected by a redistribution of income as discussed by the authors, regardless of differences in individual preferences and despite differences in marginal propensities to contribute to the public good.
668 citations