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Financing Public Goods with Commodity Taxes: The Tax Reform Viewpoint

Econometrica 1979 47(2), 393 open access
[This article considers an economy in which there is one public good financed by means of commodity taxes (lump sum transfers being not available). The first part of the paper is devoted to the study of tax equilibria. Sufficient conditions for the existence of an equilibrium with respect to a given tax system are given. When the tax system is modified, the structure of the corresponding set of tax equilibria is analyzed, and continuity properties of equilibria (with respect to the tax system) are stated. In the second part, attention is focused on the Pareto ranking of tax equilibria. In a given equilibrium, the directions of policy tools changes for a Pareto improvement (if any) are characterized. The "size" of the set of second best Pareto optima in the set of tax equilibria is evaluated.]

Effective Policy Tools and Quantity Controls

Econometrica 1984 52(1), 59 open access
[This article focuses on the desirability of quantity controls in an economy when the first best optimum is not attainable. Based on the analysis of constrained consumer demand, a formula for the desirability of small personalized compensated quotas is first established. Conclusions for the desirability of anonymous quotas: redistribution in kind, rationing, are derived. Actions on prices through taxes and quantity controls are compared. The analysis is also shown to have implications for the theory of optimum income taxation.]