The Pure Theory of Public Expenditure

Except for Sax, Wicksell, Lindahl, Musgrave, and Bowen, economists have rather neglected the theory of optimal public expenditure, spending most of their energy on the theory of taxation. Therefore, I explicitly assume two categories of goods: ordinary private consumption goods (X1,...,Xn) which can be parcelled out among different individuals (1, 2,...,i,...,s) according to the relations Xj =σ1 s Xj i; and collective consumption goods (Xn+1... Xn+m) which all enjoy in common in the sense that each individual's consumption of such a good leads to no subtraction from any other individual's consumption of that good, so that Xn+j = Xi n+j simultaneously for each and every ith individual and each collective…