Social Welfare and Coercion in Public Finance

50 Pages Posted: 8 Dec 2008

See all articles by Stanley L. Winer

Stanley L. Winer

Carleton University - School of Public Policy and Administration; Carleton University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

George Tridimas

University of Ulster - School of Economics

Walter Hettich

California State University, Fullerton - Department of Economics

Date Written: December 2008

Abstract

This paper develops an expanded framework for social planning in which the existence of coercion is explicitly acknowledged. Key issues concern the precise definition of coercion for individuals and in the aggregate, its difference from redistribution, and its incorporation into normative analysis. We explore modifications to traditional rules for optimal fiscal policy in the presence of coercion constraints and determine the degree of coercion implied by traditional social planning. The paper maps the trade-off between social welfare and aggregate coercion and explores its implications for normative policy and the comparative evaluation of institutions, including competitive democracy.

Keywords: coercion, redistribution, social planning, optimal fiscal policy, marginal cost of funds, public goods, collective choice

JEL Classification: D70, H10, H20, H21

Suggested Citation

Winer, Stanley L. and Tridimas, George and Hettich, Walter, Social Welfare and Coercion in Public Finance (December 2008). CESifo Working Paper Series No. 2482, Available at SSRN: https://ssrn.com/abstract=1313017

Stanley L. Winer (Contact Author)

Carleton University - School of Public Policy and Administration ( email )

1125 Colonel By Drive
Ottawa, Ontario K1S 5B6
Canada
613-520-2600 x2630 (Phone)
613-520-2551 (Fax)

HOME PAGE: http://www.carleton.ca/winer

Carleton University - Department of Economics ( email )

1125 Colonel By Drive
Ottawa, Ontario K1S 5B6
Canada
613-520-2600 ex.2630 (Phone)
613-520-2551 (Fax)

HOME PAGE: http://www.carleton.ca/winer

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

George Tridimas

University of Ulster - School of Economics ( email )

Shore Road
Newtownabbey
Co Antrim, Northern Ireland BT37 0QB BT37 0QB
United Kingdom

Walter Hettich

California State University, Fullerton - Department of Economics ( email )

Fullerton, CA 92834
United States

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