This paper develops an expanded framework for social planning in which coercion stemming from the provision of public goods is explicitly acknowledged. Key issues concern the precise definition of coercion, its difference from redistribution, and its incorporation into social welfare optimization. The paper examines the implications for optimal policy, showing how the Samuelson condition, rules for optimal linear income taxation and commodity taxation, and for the marginal cost of public funds must be modified. In addition, the trade-off between social welfare and coercion is mapped under specific conditions and the implications of this trade-off for normative policy choice are considered.

Additional Metadata
Keywords Coercion, optimal linear income taxation, optimal commodity taxation, marginal, cost of public funds, public goods, collective choice
JEL Analysis of Collective Decision-Making: General (jel D70), Structure and Scope of Government: General (jel H10), Taxation, Subsidies, and Revenue: General (jel H20), Efficiency; Optimal Taxation (jel H21)
Publisher Department of Economics
Series Carleton Economic Papers
Citation
Winer, S.L, Tridimas, George, & Hettich, Walter. (2007). Social Welfare and Collective Goods Coercion in Public Economics (No. CEP 07-03). Carleton Economic Papers. Department of Economics.