A Theory of Demand for Governmentally Supplied Goods and Services

Part of the International Studies in Economics and Econometrics book series (ISEE, volume 28)


The paper proposes a theory of demand for governmentally supplied goods and services which takes seriously the facts that there are numerous centers of power in all governments and that few of these are elected. The paper rejects the idea that the competition which exists between these centers of power is solely motivated by hubris or megalomania. It argues that the incitation to compete is furnished by the need of centers of power for the consent of citizens. Citizens, in turn, it is assumed, grant more of their consent if, at given taxprices, centers of power provide them with goods and services in quantities that more closely approach the quantities they desire. It is, therefore, intragovernmental competition which activates the mechanisms which lead citizens to reveal their nominal demands for governmentally supplied goods and services. It is the same competition, it is further argued, which explains why governmental centers of power, not only sponsor the creation of demand lobbies, but also contribute to the solution of the free-riding and shirking problems that confront these lobbies.


Public Good Public Choice Demand Function American Economic Review Utility Loss 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Alesina, Alberto. “Macroeconomics and Politics.” InNBER Macroeconomics Annualedited by Stanley Fischer. Cambridge, Mass: MIT Press, 1988Google Scholar
  2. Alesina, Alberto. “Politics and Business Cycles in Industrial Democracies.”Economic Policy4, no.1 (April 1989): 55–98CrossRefGoogle Scholar
  3. Alesina, Alberto, and Roubini, Nouriel. “Political Cycles in OECD Economies.” Mimeo, 1990Google Scholar
  4. Arrow, KennethJ. Social Choice and Individual Value.New York: Wiley, 1951. Revised edition, 1963Google Scholar
  5. Arrow, Kenneth J. “Toward a Theory of Price Adjustment.” InThe Allocation of Economic Resourcesedited by Paul A. Baran, Tibor Scitovsky and Edward S. Shaw. Stanford, Conn: Stanford University Press, 1959Google Scholar
  6. Becker, Gary S. “A Theory of Competition Among Pressure Groups for Political Influence.”Quarterly Journal of Economics98, no.3 (August 1983): 371–400CrossRefGoogle Scholar
  7. Bergstrom, Theodore C., and Goodman, Robert P. “Private Demands for Public Goods.”American Economic Review63, no.3 (June 1973): 280–296Google Scholar
  8. Birdsall, William C. “A Study of the Demand for Public Goods.” InEssays in Fiscal Federalismedited by Richard A. Musgrave. Washington: Brookings Institution, 1965Google Scholar
  9. Black, Duncan.The Theory of Committees and Elections.Cambridge: Cambridge University Press, 1958Google Scholar
  10. Borcherding, Thomas E., and Deacon, Robert T. “The Demand for the Services of Non-Federal Governments.”American Economic Review62, no.5 (December 1972): 891–901Google Scholar
  11. Breton, Albert. “A Model of Political Consent.” Typescript, 1988Google Scholar
  12. Breton, Albert. “The Growth of Competitive Governments.”Canadian Journal of Economics22, no.4 (November 1989): 717–750CrossRefGoogle Scholar
  13. Breton, Albert. “The Organization of Competition in Congressional and Parliamentary Governments.” InThe Competitive State Villa Colombella Papers on Competitive Politicsedited by Albert Breton, Gianluigi Galeotti, Pierre Salmon and Ronald Wintrobe. Dordrecht: Kluwer, 1991Google Scholar
  14. Breton, Albert. “Checks and Balance.” Typescript, 1991Google Scholar
  15. Breton, Margot. “Reflections on Social Action Practice in France.”Social Work with Groups14, no. 3/4 (1991): 91–107Google Scholar
  16. Browning, Edgar J. “The Marginal Cost of Public Funds.”Journal of Political Economy84, no.2 (April 1976): 283–298CrossRefGoogle Scholar
  17. Buchanan, James M. “An Economic Theory of Clubs.”Economica32, no. 125 (February 1965): 1–14CrossRefGoogle Scholar
  18. Buchanan, James M.Public Finance in Democratic Process.Fiscal Institutions and Individual Choice. Chapel Hill: University of North Carolina Press, 1967Google Scholar
  19. Clarke, Edward H. “Multipart Pricing of Public Goods.”Public Choice11 (Fall 1971): 17–33CrossRefGoogle Scholar
  20. Coleman, James S. “The Possibility of a Social Welfare Function.”American Economic Review56, no.5 (December 1966): 1105–1122Google Scholar
  21. Cross, Rod B., and Shaw, Keith G. “The Evasion-Avoidance Choice: A Suggested Approach.”National Tax Journal34, no.4 (December 1981): 489–491Google Scholar
  22. Deacon, Robert T. “Private Choice and Collective Outcomes: Evidence from Public Sector Demand Analysis.”National Tax Journal30, no.4 (December 1977): 371–386Google Scholar
  23. Deacon, Robert T. “A Demand Model for the Local Public Sector.”Review of Economics and Statistics60, no.2 (May 1978): 184–192CrossRefGoogle Scholar
  24. Deacon, Robert T., and Shapiro, Perry. “Private Preference for Collective Goods Revealed Through Voting on Referenda.”American Economic Review65, no.5 (December 1975): 943–955Google Scholar
  25. Denzau, Arthur T., and Mackay, Robert J. “Tax Systems and Tax Shares.”Public Choice45, no.1 (1985): 35–47CrossRefGoogle Scholar
  26. Frey, Bruno S. “Politico-economic Models and Cycles.”Journal of Public Economics9, no.2 (April 1978): 203–220CrossRefGoogle Scholar
  27. Frey, Bruno S., and Schneider, Friedrich. “An Empirical Study of Politico-Economic Interaction in the United States.”Review of Economics and Statistics60, no.2 (May 1978): 174–183CrossRefGoogle Scholar
  28. Galeotti, Gianluigi, and Breton, Albert. “An Economic Theory of Political Parties.”Kyklos39 (1986): 47–65CrossRefGoogle Scholar
  29. Galeotti, Gianluigi and Forcina, Antonio. “Political Loyalties and the Economy: The U.S. Case.”Review of Economics and Statistics71, no.3 (August 1989): 511–517CrossRefGoogle Scholar
  30. Gordon, Scott H. “Guarding the Guardians. An Essay on the History and Theory of Constitutionalism.” Mimeo, 1986Google Scholar
  31. Groves, Theodore. “Incentives in Teams.”Econometrica41, no.3 (July 1973): 617–631Google Scholar
  32. Hartle, Douglas G.The Expenditure Budget Process of the Government of Canada: A Public Choice-Rent-Seeking Perspective.Toronto: Canadian Tax Foundation, 1988Google Scholar
  33. Hettich, Walter, and Winer, Stanley L. “Economic and Political Foundations of Tax Structure.”American Economic Review78, no.4 (September 1988): 701–712Google Scholar
  34. Hibbs, Douglas A. “Political Parties and Macroeconomic Policy.”American Political Science Review71, no.4 (December 1977): 1467–87CrossRefGoogle Scholar
  35. Hibbs, Douglas A.The American Political Economy.Cambridge, Mass: Harvard University Press, 1987Google Scholar
  36. Inman, Robert P. “Markets, Governments, and the ”New“ Political Economy.” InHandbook of Public Economicsvol. 2, edited by Alan J. Auerbach and Martin Feldstein. Amsterdam: North-Holland, 1987Google Scholar
  37. Johnston, Richard.Public Opinion and Public Policy in Canada: Questions of Confidence.Toronto: University of Toronto Press, 1986Google Scholar
  38. Kraan, Dirk Jan.Budgetary Decisions.Ph.D. Dissertation, Erasmus University, Rotterdam, 1990Google Scholar
  39. Lafay, Jean-Dominique. “L’opposition dans le système politico-économique: analyze théorique et étude empirique du cas français.”Journal des Economistes et des Etudes Humaines1, no.1 (Hiver 1989–1990): 43–59Google Scholar
  40. Lancaster, Kelvin J. “A New Approach to Consumer Theory.”Journal of Political Economy74, no.2 (April 1966): 132–157CrossRefGoogle Scholar
  41. Moore, Thomas G. “The Purpose of Licensing.”Journal of Law and Economics4 (October 1961): 93–117CrossRefGoogle Scholar
  42. Mueller, Dennis C. “The Possibility of a Social Welfare Function: Comments.”American Economic Review57, no.5 (December 1967): 1304–11Google Scholar
  43. Mueller, Dennis C.Public Choice II.New York: Cambridge University Press, 1989Google Scholar
  44. Niskanen, William A., Jr.Bureaucracy and Representative Government.Chicago: Aldine-Atherton, 1971Google Scholar
  45. Nordhaus, William D. “The Political Business Cycle.”Review of Economic Studies42, no.2 (April 1975): 169–190CrossRefGoogle Scholar
  46. Olson, Mancor Jr.The Logic of Collective Action.Cambridge: Harvard University Press, 1965Google Scholar
  47. Paldam, Martin. “A Preliminary Survey of the Theories and Findings on Vote and Popularity Functions.”European Journal of Political Research9, no.2 (June 1981): 181–199CrossRefGoogle Scholar
  48. Paldam, Martin. “Does Politics Matter After All? A Comparative Test of Partisan Cycles on Data for 17 Countries.” Paper Presented at the European Public Choice Society Meetings, Linz, Austria, 1989Google Scholar
  49. Panagopoulos, Epaminondas P.Essays on the History and Meaning of Checks and Balances.Lanham: University Press of America, 1985Google Scholar
  50. Plott, Charles R. “A Notion of Equilibrium and its Possibility Under Majority Rule”American Economic Review57, no.4 (September 1967): 787–806Google Scholar
  51. Pommerehne, Werner W. “Institutional Approaches to Public Expenditure: Empirical Evidence from Swiss Municipalities.”Journal of Public Economics9, no.2 (April 1978): 255–280CrossRefGoogle Scholar
  52. Pommerehne, Werner W., and Frey, Bruno S. “Two Approaches to Estimating Public Expenditures.”Public Finance Quarterly4, no.4 (October 1976), pp. 395–407CrossRefGoogle Scholar
  53. Potters, Jan and van Winden, Frans. “An Asymmetric Information Game of Persuasive Lobbying.” Paper Presented at the European Public Choice Meetings, Meersburg, 1990Google Scholar
  54. Potters, Jan and van Winden, Frans. “Modelling Political Pressure as Transmission of Information.”European Journal of Political Economy6, no. 1 (1990): 61–88CrossRefGoogle Scholar
  55. Roll, Richard. “The Hubris Hypothesis of Corporate Takeovers.”Journal of Business59, no.2, pt.1 (April 1986): 197–216CrossRefGoogle Scholar
  56. Rubinfeld, Daniel L. “Voting in a Local School Election: A Micro Analysis.”Review of Economics and Statistics59 no.1 (February 1977): 30–42CrossRefGoogle Scholar
  57. Rubinfeld, Daniel L. “The Economics of the Local Public Sector.” InHandbook of Public Economicsvol. 2, edited by Alan J. Auerback and Martin Feldstein. Amsterdam: North-Holland, 1987Google Scholar
  58. Salmon, Pierre. “The Logic of Pressure Groups and the Structure of the Public Sector.” InVilla Colombella Papers on Federalism European Journal of Political Economyvol. 3, nos.1 & 2, edited by Albert Breton, Gianluigi Galeotti, Pierre Salmon and Ronald Wintrobe, 1987Google Scholar
  59. Salmon, Pierre. “Decentralization as an Incentive Scheme.”Oxford Review of Economic Policy3, no.2 (Summer 1987): 24–43CrossRefGoogle Scholar
  60. Salmon, Pierre, and Wolfelsperger, Alain. “From Competitive Equilibrium to Democratic Equilibrium: Has the Analogy been Fruitful.” Paper Presented at the European Public Choice Society, Meersburg, 1990Google Scholar
  61. Samuelson, Paul A. “The Pure Theory of Public Expenditure.”Review of Economics and Statistics36, no.4 (November 1954): 387–389CrossRefGoogle Scholar
  62. Schram, Arthur and van Winden, Frans. “Revealed Preferences for Public Goods: Applying a Model of Voter Behavior.”Public Choice60, no.3 (March 1989): 259–282CrossRefGoogle Scholar
  63. Smith, Bruce, L.R. (ed.).The New Political Economy: The Public Use of the Private Sector.London: Macmillan, 1975Google Scholar
  64. Stigler, George J. “The Theory of Economic Regulation.”Bell Journal of Economics and Management Science2, no.1 (Spring 1971): 3–21CrossRefGoogle Scholar
  65. Stigler, George J. “Economic Competition and Political Competition.”Public Choice13 (Fall 1972): 91–106. [with p. 101 appearing inPublic Choice14 (Spring 1973): 166Google Scholar
  66. Stigler, George J. “Free Riders and Collective Action: An Appendix of Theories of Economic Regulation.”Bell Journal of Economics and Management Science5, no.2 (Autumn 1974): 359–65CrossRefGoogle Scholar
  67. van Winden, Frans.On the Interaction Between State and Private Sector.Amsterdam: North-Holland, 1983Google Scholar
  68. van Winden, Frans. “Man in the Public Sector.”De Economist135, no.1 1987: 1–28CrossRefGoogle Scholar
  69. Weisbrod, Burton A.The Nonprofit Economy.Cambridge: Harvard University Press, 1988Google Scholar
  70. Wilson, James Q., and Banfield, Edward C. “Voting Behavior on Municipal Public Expenditures: A Study in Rationality and Self-interest.” InThe Public Economy of Urban Communitiesedited by Julius Margolis. Washington: Resources for the Future, 1965Google Scholar

Copyright information

© Springer Science+Business Media New York 1993

Authors and Affiliations

There are no affiliations available

Personalised recommendations