Public Goods, Environmental Externalities and Fiscal Competition

Over the last forty years, the field of public economics has emerged as a modern successor to public finance. It has gained importance on the research agenda of economists and in the curricula of economics depa- ments. It has become a diversified field, rich in theoretical developments and substantive applications. Beyond the traditional concerns with t- ation or public goods, a number of new concerns have entered the scene, concerning for instance public sector pricing, the management of public firms, social security or federalism. A comprehensive presentation of the field extends nowadays beyond the scope of textbooks and requires access to a growing specialised literature. The present volume, collecting 22 papers published by Henry Tulkens over the period 1978–2003, is offered as an illustration of these new developments. The illustration has three dimensions: approach, s- ject matters and methods. Coming from a single author, admittedly assisted by 18 co-authors, the different papers are illustrative of an underlying general approach, which I like to label ‘‘operational public economics’’. With these simple words, I mean an approach under which issues in public economics are formulated so as to capture essential elements of actual situations. Ty- cally, this leads to theoretical models more complex than standard te- book formulations. It is then up to the public economist to extend the theory as needed to fit the situation.

The twenty-two papers collected in this volume illustrate the itinerary of Henry Tulkens, an applied theorist, on the occasion of his retirement from teaching.  The collection is structured in four parts:

I.  Decentralized resource allocation processes for public and private goods

II. Environment, public goods and externalities

III. Efficiency analysis

IV. Fiscal competition and optimality

 

The four pictures above evoke a key concept, method or model used in each of these four parts:

> MDP-type processes to determine feasible paths to efficiency and coalitional stability.

> CLIMNEG World Simulation model to explore alternative environmental scenarios for the planet.

> Free Disposal Hull efficiency analysis to drop convexity and help deal with outliers.

> Non Cooperative Fiscal Equilbria to characterize the outcomes of fiscal competition