Chapter 18

The Second-Best Theory of Public Expenditures

Overview

Abstract

The second-best public expenditure theory has been at the forefront of theoretical developments in public sector economics for the past 50 years. Chapter 18 previews the content of Chapters 19 through 25, which present a selection of second-best analyses of transfer payments, public insurance, externalities, decreasing cost services, and government production, as well as an introduction to the new field of behavioral public finance.

Keywords

Behavioral economics; Medical insurance; Public (social) insurance; Second-best expenditure theory; Social security pensions
The second-best public expenditure theory has been at the forefront of theoretical developments ...

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