Economies with Multiple Public Projects

Abstract

This paper discusses a general equilibrium model of an economy with multiple separately provided public projects. We assume an additively separable cost structure and consider valuation equilibria with separated finance systems, one for each collective good. Under non‐Euclidean representation we show the decentralization of Pareto efficient allocations by valuation equilibria and the equivalence of the core and the set of nonnegative valuation equilibria. In the case of Euclidean representation, every Pareto efficient allocation is shown to be supported as an affine valuation equilibrium that is characterized by a personalized price per unit of each public good and a personalized lump sum tax or subsidy. These results complement and clarify already established insights into Lindahl pricing and its generalizations developed in the literature.