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Understanding Poverty$
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Abhijit Vinayak Banerjee, Roland Bénabou, and Dilip Mookherjee

Print publication date: 2006

Print ISBN-13: 9780195305197

Published to Oxford Scholarship Online: September 2006

DOI: 10.1093/0195305191.001.0001

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Public Goods and Economic Development

Public Goods and Economic Development

(p.285) 19 Public Goods and Economic Development
Understanding Poverty

Timothy Besley

Maitreesh Ghatak

Oxford University Press

Despite overwhelming evidence that a large fraction of government expenditure on the provision of public goods in developing countries does not reach the intended beneficiaries, public policy debates often continue to revolve around “how much?” (i.e., how much money is spent by the government on some particular public good). Clearly, the question to ask is “how?” (i.e., how to design effective mechanisms for the delivery of public goods). This is the main theme of this essay. It discusses different kinds of public goods that are vital to the poor and the evidence of their value; the spontaneous or voluntary private provision of public goods by the beneficiaries; and the formal provision of public goods where the government or some other organization is in charge of providing the public good, with special emphasis on institution design issues.

Keywords:   poor, developing countries, institution design, incentives, NGO, public sector contracting, competition

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