Effects of club size in the provision of public goods. Network and congestion effects in the case of the French municipalities

Abstract

The article formalizes and measures the impact of club size on the quality of the public good provided to its members. Under a general framework we describe various functional forms that allow either network or crowding effects. Mechanisms of provision are that of a political process in which both the demand and the supply sides are considered. Estimations use the whole set of French municipalities. The supply model performs better than the demand model in the case of small municipalities, while for large cities the demand model has higher explanatory power. In so far as impact of city size on the quality of club goods is concerned, crowding does appear, but it does so in different patterns. For small towns marginal congestion first decreases then increases with population. Marginal congestion is decreasing for cities of intermediate size. For larger cities no significant effects are observed. © RSAI 2002.