ABSTRACT
Many goods do not satisfy these criteria but are still public goods in some important sense of the term. We will study the characteristics of some of these goods in this chapter. Since some public goods are crowdable, there will be an incentive for groups of people to come together to enjoy and exclude others. This is the theory of clubs which we will study here. One way of analyzing local public goods is to think of the consuming public shop ping around for the local jurisdiction that supplies a preferred local public goods/local tax package. This is the subject of the Tiebout hypothesis which we will also study here. This chapter also examines impure and crowdable public goods as well as public goods production with distortionary taxation and under conditions of asymmetric information. Finally, we recognize since there remains an element of arbitrariness in public goods supply and also because public goods are inherently desirable, there will be a tendency by residents to lobby for locating public goods in their locality. This is related to the phenomenon of rent seeking which we will consider here. Thus a whole host of issues has to be discussed to which we now turn.
