Information and Under-Provision of Local Public Goods

We present an electoral theory on the public provision of local public goods to an imperfectly informed electorate. We show that electoral incentives lead to the efficient provision of local public goods only if the electorate is not well informed. An informed electorate induces candidates to under-provide local public goods, deviating from socially optimal allocations in order to target funds only to specific constituencies. Information generates an efficiency loss