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On Allocation Contests for Publicly Provided Goods

On Allocation Contests for Publicly Provided Goods In many countries, the government provides goods and services that are rival in consumption—essential commodities, such as water, public transportation and basic health care, and merit goods like professional education and tertiary health care. For such goods, the government has to specify allocation rules under which citizens can access them. Affluent citizens often have the incentive and the ability to influence public allocation rules by engaging in allocation contests. This article presents simple models of allocation contests for a divisible essential commodity and an indivisible merit good, and studies contest equilibria and their implications for social outcomes. Given allocation contests over public provision, falling public supply of an essential commodity can have magnified negative impact on social welfare, and raising the reservation quota of a publicly provided merit good for a set of disadvantaged citizens might effectively lower their access to the good.JEL: C72, D61, H42 http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png South Asian Journal of Macroeconomics and Public Finance SAGE

On Allocation Contests for Publicly Provided Goods

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References (5)

Publisher
SAGE
Copyright
© 2018 SAGE Publications
ISSN
2277-9787
eISSN
2321-0273
DOI
10.1177/2277978718760445
Publisher site
See Article on Publisher Site

Abstract

In many countries, the government provides goods and services that are rival in consumption—essential commodities, such as water, public transportation and basic health care, and merit goods like professional education and tertiary health care. For such goods, the government has to specify allocation rules under which citizens can access them. Affluent citizens often have the incentive and the ability to influence public allocation rules by engaging in allocation contests. This article presents simple models of allocation contests for a divisible essential commodity and an indivisible merit good, and studies contest equilibria and their implications for social outcomes. Given allocation contests over public provision, falling public supply of an essential commodity can have magnified negative impact on social welfare, and raising the reservation quota of a publicly provided merit good for a set of disadvantaged citizens might effectively lower their access to the good.JEL: C72, D61, H42

Journal

South Asian Journal of Macroeconomics and Public Finance – SAGE

Published: Jun 1, 2018

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