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In a recent paper, Fleming, Heinecke and Dollery (2007) developed the government failure taxonomic system advanced by Charles Wolf into a conceptual framework to incorporate positive and negative internalities for analyzing public programs and policies. However, their paper unfortunately ignored the treatment of budget internalities, often an important question in real-world policy applications. This neglect is remedied in the present note by extending the analytical framework to include this important type of internal cost. |
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