Externalities and public expenditure theory


Externalities and public expenditure theory

[James M. Buchanan]

(The collected works of James M. Buchanan, v. 15)

Liberty Fund, c2001

  • : pbk

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Includes bibliographical references and indexes



In his foreword, Geoffrey Brennan states, "The papers in this volume represent a coherent set of pieces focused on aspects of public-expenditure theory and constitute all of Buchanan's papers in this area." Buchanan's work on the subject of what governments should do and his insistence on Knut Wicksell's ideal that taxation and public expenditure be integrated topics have contributed significantly to the current thinking of most economists on the topic. Geoffrey Brennan summarises Buchanan's central themes in this way, "There are two messages that emerge from this work: one is that a proper sense of the extent of market failure, rather than its mere presence, is relevant in all cases; the other is that 'correcting' for such market failure is often a complex multidimensional business not captured by direct public provision at zero price and not necessarily involving expansion of market output." The twenty-nine papers represented in this volume are grouped into these major subject categories: public services and collective action, externalities, clubs and joint supply, public goods theory, applications -- city, health, and social security, distributive norms and collective action. This volume also includes what are arguably Buchanan's two most famous articles: 'Externality', which he wrote with William Stubblebine, and 'Economic Theory of Clubs'.

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