School of Economics


This thesis investigates the extent to which the politioal mechanism succeeds in providing public goods so that this supply reflects consumer preferences. In a world of private goods^ a competitive market would theoretically ensure an optimal supply of each good. But with the introduction of public goods^ the very nature of these goods prevents the market from achieving this optimal supply. A Pareto optimal solution would require that consumers he charged according to their marginal evaluations of each public good. Those with higher evaluations should pay more, \ihilst there exists the possibility of cost shares being determined in this way, rational consumers will disguise their preferences.



Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily represent the views of the University of Wollongong.