Collective Choice and General Fund Financing

This paper develops a geometrical model for the analysis of the collective decision process known as general fund financing. The model is used to compare the outcomes produced under general fund financing and simple majority voting and to explore the comparative statics properties of general fund financing. The major conclusion is that general fund financing often produces unpredictable and paradoxical outcomes. For example, a change in the preferences of voters which would lead to increased outputs of each of two public goods under simple majority voting can produce reduced outputs of both public goods under general fund financing.