User Charging

Abstract

User charges are of two broad types:

• i) First and foremost, they comprise payments made by private sector consumers, both individuals and firms, to meet all or part of the costs of goods or services provided to them by the public sector.

• ii) Second, they refer to the internal prices of goods and services provided by one government department or agency to another (see Allen and Tommasi 2001).

The chapter sets out the theoretical and practical considerations to be taken into account in deciding whether to charge for a public service (rather than relying on financing from general taxation or a specific tax) and, if so, how much.