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A THEORY OF PATERNALISTIC IN‐KIND TRANSFERS
Author(s) -
BROWNING EDGAR K.
Publication year - 1981
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1981.tb00339.x
Subject(s) - paternalism , externality , economics , pareto principle , consumption (sociology) , microeconomics , pareto optimal , mathematical economics , multi objective optimization , mathematical optimization , operations management , sociology , mathematics , social science , market economy
Consumption externalities are frequently cited as a justification for in‐kind transfers. In the presence of consumption externalities, in‐kind transfers may achieve a Pareto optimal allocation. This paper argues that actual in‐kind transfers do not achieve a Pareto optimum, but instead tend to produce a paternalistic optimum which caters to the preferences of taxpayers (donors) and ignores the preferences of recipients.