It has been concluded by some that no positive price for a public good is con-sistent with consumption efficiency as it will discourage consumption that could be provided at zero cost. It is argued here that this conclusion is m error because it fails to distinguish between two distinct...

This article investigates the impact of earmarking on tax revenues. By dedicat-ing revenues to a particular purpose, earmarking overcomes a free-rider problem among interest groups. The group receiving the benefits of the dedi cated revenues has a strong incentive to lobby for higher effective...

Recent studies have questioned the empirical relevance and normative validity of the traditional prescriptions for optimal taxation based on Ramsey's original in sights. The present authors analyze governments that maximize net political benefits, which only imperfectly represent net social...