Separation of the redistributive and allocative functions of government: A public choice perspective |
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Authors: | Marilyn R. Flowers Patricia M. Danzon |
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Affiliation: | The University of Oklahoma, Norman, OK 73019, USA;Center for Health Policy, Duke University, Durham, NC 27706, USA |
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Abstract: | The implications of not separating the redistributive and allocative functions of government are examined from a public choice perspective. Many democratic governments lump transfers and public services into a single unified budget. This can distort voter perceptions of the marginal cost of public services relative to the marginal tax price embodied in the taxing institutions employed to generate public revenue. If the median voter's perception of marginal cost is affected, the majority rule outcome with respect to public goods spending will be altered correspondingly. |
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