We study externality costs of capital investment under limited commitment. We solve for the constrained efficient allocation with a limited commitment environment and find positive externality costs of capital investment provided that full-risk-sharing is not feasible. In a decentralized version...

This paper studies the provision of public inputs in a federal system. A vertical tax externality is also considered in a simple general equilibrium model used to analyze the efficiency of equilibria under different scenarios. The results show that the state provision of public inputs may affect...

This chapter presents a framework for evaluating the quality and timeliness of Public Expenditure Review (PER) as well as conducting a review of its impact. Public Expenditure Review (PER) is a widely used tool by the development assistance community to develop advice on budgetary institutions...

We consider an overlapping generations (OLG) economy with land as a fixed factor of production and an environmental externality on production in which tax revenue from land rent and/or from other schemes such as labor income, capital income, and production taxation can be used for environmental...

It is a truism among economists that only if the full costs and benefits of economic activity are taken into account by the entrepreneur, will resources be allocated in a Pareto Optimal manner. Under present economic conditions, however, some manufacturers are able to impose costs, particularly...