The purpose of this paper is twofold. First, it extends previous models of non-cooperative private funding of pure public goods by allowing both for distortionary taxation of private goods and for subsidies based on contributions to the public goods. Second, it clarifies the type of behavioral and informational assumptions which are needed to insure neutrality of both lump-sum and distortionary policies. The analysis is developed in the context of fiscal federalism.

David E. Wildasin / dew@davidwildasin.us