The purpose of this paper is twofold. First, it extends previous models of non-cooperative private funding of pure public goods by allowing both for distortionary taxation of private goods and for subsidies based on contributions to the public goods. Second, it clarifies the type of behavioural...

This paper analyzes government policy when random shocks affect particular industries, occupations or regions. Workers can freely choose and industry or occupation ex ante, and can relocate at a cost, once uncertainty is resolved. The policy instruments available are per capita taxes and...

This paper suggests a dual to the many-person applied welfare economics problem with constraints on lump-sum redistribution. The dual has the property of minimizing an aggregator function over individual income transfers. The properties of the aggregator are dependent upon the resource costs of...

From 1967-1982, Canada's equalization program was based on a formula which ensured that all provinces had access to national average revenues per capita for a wide set of revenue sources. The Representative Tax System (RTS) formula was replaced in 1982 by a new Representative Average Standard...

This paper surveys the evolution of the use of the theory of second best in public economics. It argues that much of modern normative public economics can be interpreted as simply applied second-best analysis. The original theory of second best as expounded by Lipsey and Lancaster involved...

Governments typically used expenditures extensively as redistributive devices. Examples include the public provision of health, education, welfare, and public pensions. The purpose of this paper is to investigate the normative rationale for such policies. In particular, we study the role of...

A classic argument in the theory of crime is that optimal enforcement policy should involve maximal sanctions combined with minimal detection costs. Yet this is rarely observed in the real world. We argue that reson for this has to do with the time inconsistency of such a policy. If sanctions...

This paper investigates the efficiency argument for a vertical fiscal gap in a federation using a simple model of a central government and several identical states. Each level provides a public good to residents within its jurisdiction and finances it by taxing labour income and rents. If labour...

Evasion and time inconsistency have been prominent concerns in recent discussions capital income taxation, both theoretical and applied. This paper establishes a link between them, suggesting a potentially useful role for evasion additional to those previously identified: by committing to...

The importance and complexity of petroleum and hard minerals operations is matched by the importance and complexity of finding effective ways to tax them. Many of these challenges arise in other activities too (exhaustibility of deposits being the main exception), but they take such extreme form...