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Private provision of public goods and information diffusion in social groups

Private provision of public goods and information diffusion in social groups

Understanding how and why social connections can shape voluntary giving also has implications for understanding how government policies affect private giving. As many developed countries are increasing their reliance on the private sector to meet collective needs, we see a shift in the use of public resources from the funding of public provision to the subsidization of private provision. Our findings suggest that, in designing such subsidies, policymakers may be able to leverage on the relationship between private giving and social structure to maximize their impact; specifically, targeted subsidies towards fundraising effort at the local level may be an effective way of promoting private giving at the central level.
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Selling to Socially Responsible Consumers: Competition and the Private Provision of Public Goods

Selling to Socially Responsible Consumers: Competition and the Private Provision of Public Goods

Many Žrms, in an attempt to attract “green” or socially responsible consumers, now engage in what Baron (2001) calls strategic corporate social responsibility: in an attempt to maximize proŽts, Žrms privately provide a public good as part of their business or marketing strategy. Examples include cause-related marketing, eco-labeling, and corporate donations to “worthy” causes. In this paper, we analyze the impact of competing for socially responsible consumers in this manner and its effects on the private provision of public good. That is, since the amount of the public good provided is a by-product of product-market competition between Žrms, it should depend on how competitive the industry is. To examine these issues, we analyze both Bertrand and Cournot competition in the market for the private good and analyze two different cases: when the amount of the public good provided is explicitly linked to the amount of the private good the Žrms sells (as when the Žrm promises to donate a percentage of sales to a “worthy” cause), and when the provision of the public good is only implicitly linked to the sales of the private good (lump-sum donations to “wor- thy” causes).
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Public versus Private Provision of Public Goods

Public versus Private Provision of Public Goods

Tables V-a and V-b present the ranges of sustainable tax rates when . When the public good is provided at this relatively high level and tastes vary (cases 2 and 3), lower taxes and larger subsidies are sustainable for individuals who place a smaller marginal value on the private good (individuals 2 and 3). In particular, at any given discount factor, the maximum and minimum tax rates are increasing with taste for the public good ( ). One can think of this as a tendency towards benefit taxation. While this effect is present under both public and private provision, it is more pronounced under private provision, with a much narrower range of sustainable tax rates. When incomes vary, public provision requires greater contributions (as a percentage of income) from richer individuals. For example, in case 7 (with extreme income heterogeneity), the highest-income individual pays no less than a 35 percent tax rate when . However, the two low-income individuals can receive large subsidies. One can think of this as a tendency towards progressive taxation. This effect does not appear in a consistent way under private provision.
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Private Actors & Structural Balance: Militia & the Free Rider Problem in Private Provision of Law

Private Actors & Structural Balance: Militia & the Free Rider Problem in Private Provision of Law

Morriss, Private Actors & Structural Balance: Militia & the Free Rider Problem in Private Provision of Law, 58 Mont... PRIVATE ACTORS & STRUCTURAL BALANCE: MILITIA & [r]

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Private Provision of Water Service in Brazil: Impacts on Access and Affordability

Private Provision of Water Service in Brazil: Impacts on Access and Affordability

Brazil has been experimenting with Private Sector Participation (PSP) in the water and sanitation sector in various forms since the mid-nineties, one of the most common being concession contracts. Currently, 25% of the population is served by companies with private sector participation and this figure could grow to 36% within 10 years. This paper studies past and ongoing experiences with private provision of water services in Brazil and assesses their impact on access and affordability indicators. It also discusses the social policies in place to improve those indicators, especially those targeting the poor. It uses different estimation methods and datasets to determine whether or not there is any difference in access to water supply and ability to pay water bills between municipalities that opted to entrust the provision of water services with private operators and those that kept them public. Moreover, whenever possible, the analysis is broken down by income (GDP) deciles in an attempt to evaluate the impact of private provision on lower income families. The results obtained entail the conclusion that PSP in Brazil has delivered higher access to water services, benefiting mostly the poor. They are inconclusive regarding affordability of water services though.
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Pareto improving interventions in a general equilibrium model with private provision of public goods

Pareto improving interventions in a general equilibrium model with private provision of public goods

Note that the intervention studied will coexist along with private provision of public goods. The cases we cover include using taxes only on the households contributing strictly positive amounts towards the public good, which is the case where the existing standard neutrality results on the amount of public good produced apply with full force. Thus, even when private fi nancing of public goods is taken as a given institutional assumption, we show that there exists a standard type of intervention involving government provision of public good via lump-sum taxation that Pareto improves upon the equilibrium outcome. Therefore, a general non-neutrality result (in terms of utilities) holds, and this is the case even when all households are strict contributors to the public good. This result has no direct or indirect counterpart in the one private good, one public good with linear production technology framework, since there interventions that involve only the contributing households are neutralized in equilibrium.
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On the Private Provision of Fiat Currency

On the Private Provision of Fiat Currency

The stability of the monetary system is another issue that arises with the private provision of currency. In an environment without uncertainty about the behavior of the monopolist punishment strategies work very e¤ectively to sustain the monetary equilibrium because the slightest suspicion that an issuer is abusing his position will trigger autarky. In an environment with uncertainty such suspicions can arise when they are false. In such environments the monetary system is very fragile since it can collapse without real cause as in the bank-run literature where a run on a bank can occur even when the bank is perfectly
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Public versus private provision of liquidity: is there a trade-off?

Public versus private provision of liquidity: is there a trade-off?

Abstract: To what extent is public debt private liquidity? Much policy advice given in the aftermath of the financial crisis rests on the assumption that increasing public debt relaxes borrowing constraints of private households. This is the case for ad-hoc debt limits, which are exogenous to public policy. Instead, if debt limits are fully endogenous, as e.g. in the case of the natural borrowing limit, public debt has no impact. We assume that borrowing limits arise because of limited contract enforceability and are therefore determined as equilibrium outcomes. Using an incomplete markets economy in which households are subject to uninsurable earnings shocks, we show that public debt provides some liquidity, but less so than it would if constraints were imposed ad-hoc. We show that generating borrowing constraints as an equilibrium outcome substantially alters the answers to other important questions, such as for the welfare effects of government debt or its impact on real economic activity.
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The 'caring entrepreneur'? Childcare policy and private provision in an enterprising age

The 'caring entrepreneur'? Childcare policy and private provision in an enterprising age

of the primary aims of the research was to understand the changes being brought about to private sector childcare in Ireland as a result of the formalisation of the sector since 2000. In total, all 59 registered private sector services in counties Cavan and Monaghan, on the northern border of the republic, were contacted. Twenty nine providers agreed to participate and a semi-structured interview was conducted with each owner/manager. Interviews were also conducted with the County Childcare Committee in each county. Given the highly competitive nature of the sector, there was a concern on the part of the providers that information may be transmitted between services. Thus confidentiality was an important ethical component of the project, and one which had to be made clear before providers would agree to an interview. Although interviewees were speaking within the bounds of the discursive structures which shaped their experiences as care providers, using interviews reflected the feminist politics of this research, which sought to account for the lived experiences of these women as owner/managers as much as the programmatic and policy changes which shape their daily lives. To protect the identity of participants, their names have been changed in this paper. Interview transcripts were analysed based on a thematic system of coding, similar to that used by James (2006).
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Working Paper Private provision of public goods that are complements for private goods: Application to open source software developments

Working Paper Private provision of public goods that are complements for private goods: Application to open source software developments

To examine these questions, we construct the following theoretical model. There is one public good and one private good. The private good is consumed by agents or is used to provide the public good. Each agent has the technology and the resources (his/her initial endowment of the private good) to provide the public good. The technology and the resources for the public good may differ among agents. To capture the strong com- plementarity between the private and public goods, all agents are assumed to have the same Leontief utility function with respect to the consumption of the two goods. We examine participation behavior using a voluntary participation game. The participation game consists of two stages. In the first stage, all agents simultaneously choose whether to participate in the provision of a public good. In the second stage, knowing the other agents’ participation decisions, the agents who chose to participate simultaneously decide their contribution to a public good, as in a voluntary contribution game (Bergstrom et al., 1987).
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Fiscal Requirements for Price Stability in Economies with Private Provision of Liquidity and Unemployment

Fiscal Requirements for Price Stability in Economies with Private Provision of Liquidity and Unemployment

Firms, other than hiring workers, also supply private assets (claims to their future profits) that are useful as a store of value but also as collateral when agents trade in frictional decentralized financial markets. Relative to environments with a fixed supply of private assets, the channels through which monetary and fiscal policy interact are more intricate. Once the provision of private assets is endogenous, government policies that affect firms’ profits have a direct impact on the supply of private assets and unemployment. This is the case as firms link both the labor and asset markets. Thus, fiscal and monetary policies affect the relative price between private and public assets and equilibrium interest rates. Moreover, because of the decentralized labor market, taxes affect the entry decision of firms. When firms expect future taxes to be high, they reduce recruitment. Since the tax base increases with the number of jobs filled, government budget balancing requires a higher tax level, in accordance with employers’ beliefs.
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Long Term Care Insurance: Is there hope for private provision? Bridget Browne

Long Term Care Insurance: Is there hope for private provision? Bridget Browne

• The unpredictable nature and extent of future care needs, and how much the required care services will cost; people may believe, justifiably, that even if care insurance is purchas[r]

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Private provision of a public good: cooperation and altruism of internet forum users

Private provision of a public good: cooperation and altruism of internet forum users

We run an experiment with users of internet message boards. We find that forum users cooperate more with partners of their own forum than with partners from a different forum but they are equally altruistic when they made a gift to a partner of their forum or from another one. We also find that individuals are more active in the forums, the more altruistic they are; however, we find no relation between activity in the forum and cooperation. These results suggest that the public good provided in internet forums is mainly provided by a group of unconditional altruistic group of users, and that the feeling of community supports the cooperation in that provision.
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Private Provision of Highways: Economic Issues

Private Provision of Highways: Economic Issues

An alternative to specifying the toll is to specify a maximum rate of return, as was the case with California’s “91 Express Lanes,” thereby giving the franchisee substantial pricing flexibility. 16 The history of rate-of-return regulation of public utilities is not entirely encouraging. But one of its main problems —a tendency to encourage padding the capital base in order to increase allowed earnings (Averch and Johnson 1962) — is more easily controlled with roads than other types of utilities. This is because the capital stock of a road project is mostly in the road itself, whose characteristics can be specified readily. Thus, flexible pricing with an earnings cap remains a promising way to limit tolls within a private road franchise.
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On the Private Provision of Public Goods

On the Private Provision of Public Goods

Theorems 5 and 6 also pose a number of strong testable hypotheses that could be investigated by experimental economists who could, for example, impose identical payoff functions, or coul[r]

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Public education provision, private schooling and income redistribution

Public education provision, private schooling and income redistribution

The sorting mechanisms illustrated above implies regressivity: given preferences for edu- cation quality, households with higher income prefer to consume less public education and opt for private provision, implying decreasing transfers in kind; given household income, households with higher preferences for education quality are more willing to accept the opportunity costs of foregoing public education and opt out for private education provision. We investigate evidence of this mechanism on the data by quantifying the sign and size of the structural quantile treatment effect (Ma and Koenker 2006; Chernozhukov and Hansen 2006) of an exogenous increment of household income (equivalized by families needs) on the educational transfers in kind accruing to the households with children in education. Identi- fication of the desired effect relies on an instrument for household income, which is related to heterogeneity in expected tax deductions across households. We allow the desired affects to vary along the distribution of transfers in kind (which identifies opportunity costs of forego- ing public education, and hence reveals information about preferences for quality) and along the distribution of household income. We are hence able to recover the effect of household income while holding household preferences and income (and their correlation) as fixed.
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The political economy of private pension provision

The political economy of private pension provision

This thesis highlights how states make autonomous decisions in order to promote their own goal of containing fiscal exposure; not just in the short run through public reforms, but also in the long term by shaping private provision in order to avoid re-emerging fiscal pressure. It suggests that states are ultimately pragmatic in their interventions. But this takes a short-cut and could be understood as treating states as monolithic actors that are always focused on promoting long-term stability. More could be said about this. For instance, we observe that the daily political perception matters when the Coalition government in the UK decided to abolish compulsory annuities in 2014: providing more choice in this area was politically attractive, given the rotten deal many people got in the existing annuity markets. At the same time it can only amplify the challenge of pension security when retirees are allowed to take out the lump sum. Similarly, the parliamentary debates in the UK regarding pension charges revealed that certainly not all politicians were taking the long-term perspective; some Conservatives appeared more eager to avoid the difficult issue by defending non-action on grounds that it was Labour that had not introduced a cap in the first place, or by remarking that it was Labour that softened the cap on Stakeholder Pensions. Or, to take another example, the bitter opposition by the CDU/CSU against Schröder’s initial reform proposals – mainly because they felt betrayed by the SPD election campaign against their original pension cuts – is another interesting example of partisan feud.
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Public-private Partnerships for Inclusive Development: Role of Private Corporate Sector in Provision of Healthcare Services

Public-private Partnerships for Inclusive Development: Role of Private Corporate Sector in Provision of Healthcare Services

(viii) Improving health and education is essential for sustaining inclusive growth in developing countries like India where millions are living in poverty, along with the ageing population which can cause economic, social and political instability as poor and ageing means; poor health and less empowerment; (ix) Inefficiency in healthcare service delivery is due to poor quality of healthcare which is measured by life expectancy, infant and maternal mortality followed by high level of corruption in spending and employee’s absenteeism, and increasing use of private healthcare by the people Singh (2008). This can be eliminated only if the private sector and the 3 levels of governments work together to improve on quality, corruption, safety, security, and absenteeism; (x) Governments can pass regulation to earmark all tax revenue earned from the private medical tourism industry, by reinvesting the revenue into the domestic healthcare system and thus providing equal access to medical treatment and facilities for the disadvantaged rural population of India living below the poverty line and enhance local health benefits. (xi) In case of the old and retired people from all sections of the society and particularly middle class and upper middle class families are living alone. The private agencies which provide home-nursing facilities are growing and this is not regulated and accredited by the government. There are many cases where the families and agencies who are caring for caring for the old people in their own home, are taking advantage of their vulnerable age. There is a business opportunity for the major corporate private sector hospitals with partnership with government subsidy to encourage them to build and provide old age nursing homes based on high, medium and low care health facilities as in developed countries, so that old people can be taken care of and not abused by their family members and private carers at home. Medical tourism can act as a driver for improving healthcare facilities and service delivery at a subsidised cost not only to the poor but also to the ageing population by user pay system based on ability to pay principle. This will assure inclusive development and public-private provision of healthcare to all disadvantaged groups in the current context of decentralisation and globalisation of health care delivery; as economic growth and availability of first world healthcare alone does not guarantee inclusive development in access to healthcare.
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Financial Literacy and Private Old-age Provision in Germany

Financial Literacy and Private Old-age Provision in Germany

Studies of financial literacy in the US and the Netherlands found that in particular low income/low education households and women are at risk of lacking financial lit- eracy and thus accumulate low retirement wealth (see e.g. Lusardi and Mitchell (2006), van Rooji, Lusardi and Alessi (2007)). Riester pensions could address these issues, as they were designed to be especially beneficial to households with low in- come and households with children, yet the interaction with financial literacy has not been studied up until now. The questions arising are therefore along the following lines: How financially literate are individuals with a Riester compared to individuals with other private old-age savings and compared to households without any private provision? Are higher levels of financial literacy associated with more private pension coverage? Are these effects more or less pronounced for households with lower in- come?
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An Analysis of Taxation Supports for Private Pension Provision in Ireland

An Analysis of Taxation Supports for Private Pension Provision in Ireland

(exempt-exempt-exempt) model of taxing income that goes towards pensions, at the saving, accrual and payment stages (OECD, 2008)]. But the current system of tax incentives does not provide an effective way of achieving adequate private provision, despite the generous level of support. They tend to act to divert funds from other investment, rather than to increase overall pension saving, as they are poorly targeted at marginal savers. The system performs badly in terms of equality since marginal tax relief on pension contributions is worth more than twice as much to the minority of high-income households paying the higher-rate of income tax than for those paying the standard rate. The overall level of tax subsidy for pension savings is projected to rise very sharply as the population ages and people build up retirement savings. Indeed, Ireland is projected to have the largest share of income committed to these schemes in 2050 of any OECD country. Reducing the level should be accompanied by a better targeting of subsidies.
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