Coercion and Social Welfare in Public Finance

Although coercion is a fundamental and unavoidable part of our social lives, economists have not offered an integrated analysis of its role in the public economy. The essays in this book focus on coercion arising from the operation of the fiscal system, a major part of the public sector. Collective choices on fiscal matters emerge from and have all the essential characteristics of social interaction, including the necessity to force unwanted actions on some citizens. This was recognized in an older tradition in public finance which can still serve as a starting point for modern work. The contributors to the volume recognize this tradition, but add to it by using contemporary frameworks to study a set of related issues concerning fiscal coercion and economic welfare. These issues range from the compatibility of an open access society with the original Wicksellian vision to the productivity of coercion in experimental games. 'Taking seriously the role of coercion in public finance represents a significant advance in economic thinking about taxation, welfare, and collective decision making. With this finely crafted edited volume jam-packed with distinguished contributors, Martinez-Vazquez and Winer set a new agenda for the debate on the relationship between compulsion and effective government.' Margaret Levi, Director, Center for Advanced Study in Behavioral Sciences, Stanford University 'The essays in Coercion and Social Welfare in Public Finance explore analytical territory of great significance for scholarship in public finance and political economy. Written with wonderful imagination and creativity, these essays sketch numerous fertile directions for future research into the Faustian bargain that coercion necessarily creates.' Richard E. Wagner, George Mason University 'After carefully and knowledgeably defining the problem to be analyzed, namely the minimization of coercion in public finance decisions (and indeed in public affairs generally) as first conceptualized by Wicksell, Professors Martinez-Vazquez and Winer subdivided that broad topic into meaningful components that they then assigned to some of the very best scholars in this field of inquiry. The papers were discussed by equally competent specialists. To round things up, Martinez-Vazquez and Winer have produced a masterful synthesis of the papers and of the discussions, pointing, as they proceed, to matters that need further research. This is a 'must-read' book on an important subject.' Albert Breton, University of Toronto1. Coercion, welfare, and the study of public finance Jorge Martinez-Vazquez and Stanley L. Winer; Part I. Violence, Structured Anarchy, and the State: 2. The constitution of coercion: Wicksell, violence, and the ordering of society John J. Wallis; 3. Proprietary public finance: on its emergence and evolution out of anarchy Stergios Skaperdas; Part II. Voluntary and Coercive Transactions in Welfare Analysis: 4. Coercion, taxation, and voluntary association Roger D. Congleton; 5. Kaldor-Hicks coercion, Coasian bargaining, and the state Michael C. Munger; Part III. Coercion in Public Sector Economics: Theory and Application: 6. Non-coercion, efficiency and incentive compatibility in public goods John O. Ledyard; 7. Social welfare and coercion in public finance Stanley L. Winer, George Tridimas and Walter Hettich; 8. Lindahl fiscal incidence and the measurement of coercion Saloua Sehili and Jorge Martinez-Vazquez; 9. Fiscal coercion in federal systems, with special attention to highly divided societies Giorgio Brosio; Part IV. Coercion in the Laboratory: 10. Cooperating to resist coercion: an experimental study Lucy F. Ackert, Ann B. Gillette and Mark Rider; 11. Partial coercion, conditional cooperation, and self-commitment in voluntary contributions to public goods Elena Cettolin and Arno Riedl.