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To fund a public good, a government doesn't literally need to rely on voluntary contributions, it can just impose taxes to raise funds. The problem
To fund a public good, a government doesn't literally need to rely on voluntary contributions, it can just impose taxes to raise funds. The problem then is actually knowing how much of a public good is efficient, which requires knowing the marginal benefit (demand) functions of all the relevant people. It is this missing information that creates the true challenge of providing public goods efficiently. To illustrate this, consider a plan where the government is going to ask everyone their marginal benefit for a good. Then, when everyone reports their answer, the govern- ment will impose equal taxes on each person in order to fund the level of the public good that would be efficient based on the responses. That is, the tax will be 1/3 of the total cost of providing the (apparently) efficient quantity. (Note that if they required each person to pay what they said their marginal benefit was, this would become exactly a voluntary contribution setup!)
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