Private sector versus public sector externalities

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Private sector versus public sector externalities
Arman Mansoorian a, Gordon M. Myers
In federations with a multi-dimensional public sector, externalities may originate
in the private sector (private sector externalities) or in the local public sector (public
sector externalities). It is well established that correction of public sector externalities
will require a central authority. We show that with only private sector
externalities, local government equilibria are efficient. We thus have a simple rule for
the assignment of corrective policies to levels of government.

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关键词：externalit External Private sector Public public sector versus