The provision of a private good by the public sector as an income redistribution policy is considerated as a good tool against the lack of information about the agents. However, that kind of policy can lead to trade-offs between quality and redistribution, and efficiency and redistribution. Should this kind of policy be implemented it would be better to incur in one information cost, a fixed inefficiency, in order to implement a progressive tax and redistribute the income under the second welfare theorem, and not through specie's transfer. The effectiveness of the policy depends of the institutional restrictions faced by the government. If those restrictions forbid a discriminatory access to the educational system, it is necessary to forget about the possibility of maximum redistribution. All these would imply that such policy would reinforce the difference between providing support to the inequity problems.
|Number of pages||16|
|Journal||Revista de Economia del Rosario|
|State||Published - Jun 2008|
All Science Journal Classification (ASJC) codes
- Economics, Econometrics and Finance(all)