Choosing Size of Government Under Ambiguity: Infrastructure Spending and Income Taxation

• 成果类型: Article
• 署名作者: Manski, Charles F.
• 署名单位: Northwestern University
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12140
• 发表日期: 2014
• 页码: 359-376
• 关键词: partial knowledge; normative analysis; identification; POLICY

摘要

I examine choice of size of government by a planner who has partial knowledge of population preferences and the productivity of public spending. Focusing on income tax-financed spending for infrastructure, I examine scenarios where the planner observes the outcome of a status quo policy and uses various decision criteria to choose policy. The analysis shows that the planner can reasonably choose a wide range of spending levels - thus, a society can rationalise having a small or large government. I conclude that to achieve credible conclusions about the desirable size of government, we need to improve current knowledge of preferences and the productivity of spending vastly.