Papers > By author > Prug Toni

One of the defining features of the modern development have been rising inequalities, within and between regions, nations and classes. The most pronounced reductions in inequalities have occurred through the expansion of public sector production allocating outputs according to social determined criteria, such as public infrastructure, health, education, housing, sport and culture facilities. In order to advance the arguments in favor of reducing of inequalities through the expansion of public sector production and its planned allocation, an adequate theoretical framework capturing the character of the actually existing production is required. Since Paul Samuelson's 1954 seminal text, the concept of public goods, often used to grasp public sector production, has been defined and used in the neoclassical framework, framed through the notion of idealized markets. Reading through historical discussions, from German public finance and its moves towards marginalist framework, via Gerhard Colm's critique of neoclassical public goods, to Richard Musgrave's merit goods and later debates with James Buchanan and his public choice approach, the presentation critically evaluates the concept of public goods, aiming to provide an understanding which can be utilized for theorizing public sector outputs in their actually existing empirical forms. Marginalist solutions are rejected due to their approach from the consumption side, which cannot differentiate between the two types of productions: private (market mediated, allocated according to individual demand and wealth) and public (budgeted, planned and allocated according to socially negotiated criteria) one. To differentiate between the two types of productions and specific social forms their inputs, outputs and relations take, it is the production side that has to be the starting point of the conceptual framework, the presentation concludes.