ABSTRACT
The focus of theoretical welfare economics has recently drifted away from lumpsum towards non-lumpsum compensation. Implicit in the trend is the perception that the implementation of non-lumpsum compensation requires less information or more accessible information than does the implementation of lumpsum compensation. It is here argued to the contrary that there can always be found a scheme of lumpsum compensation which is preferred to any scheme of non-lumpsum compensation. However it is noted that there are deeper difficulties which have their origin in changing preferences and technologies and which are common to all schemes of compensation.
