also 7.2.2 Universal Public Provision rein tion Amend the mechanism (t, ch, i", a', i') by This adding a universal in-kind transfer progr pups that provides g units of good g to individuals ans- of both types. The good cannot be resold, and trast the program imposes a uniform lump-sum exog- tax of (p + t) g on everyone who receives g. both Given (t, c, I) and g, the individual of type j al (as = h, l, will now solve low- (24) x,g max u (x, g, i) mine rams (25) subject to x + (p +t) (g - g) tastes geting = c - (p + t) g=c, par- higher (26) g zg. an the e gov- The problem (24)-(26) imposes a mini- higher mum consumption level for g on the partici- higher pants. It may then be possible to manipulate ny but this restriction in such a way as to relax the g and binding self-selection constraint of the origi- onsider nal problem (17)-(19) and to effect Pareto s latter improvements. Cremer and Gahvari (1997) librium prove that this will be the case provided that eir model 28 Cremer and Gahvari (2002) discuss nonlinear pric- ing in a model where tastes and abilities are correlated