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In praise of inequality: income distribution and the private provision of public goods

By David de Meza, Jun-ichi Itaya and Gareth D. Myles

Abstract

It is shown that if all individuals contribute towards the provision of a public good their utilities are equalised even if the income distribution is unequal. It may seem that there is then no role for redistributive policy, but it is proved that social welfare can be raised by creating sufficient income inequality that only the rich provide public goods

Topics: HB Economic Theory
Publisher: Elsevier
Year: 1997
DOI identifier: 10.1016/S0165-1765(97)00179-1
OAI identifier: oai:eprints.lse.ac.uk:35861
Provided by: LSE Research Online
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