Natural Monopolies and Rent: A Georgist Remedy for X-Inefficiency Among Publicly-regulated Firms |
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| Authors: | George Babilot Roger Frantz Louis Green |
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| Affiliation: | George Babilot, Ph.D., Roger Frantz, Ph.D., and Louis Green, Ph.D., are professors of economics at San Diego State University, San Diego, CA92182;Dr. Babilot is director of the university's Center for Public Economics. |
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| Abstract: | Abstract . Publicly-regulated firms are sheltered from competition and are inefficient. When analyzed within the theoretical framework of X-inefficiency, it is discovered that they are subsidized by a quasi excise tax and result in deadweight losses to society. When the losses and X-inefficiency are understood as rent, an appropriate public policy is to levy a tax on these firms. A tax would raise productivity and increase tax revenues without reducing output. |
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