Distributed Public Economics and Decentralized

Abstract

We propose a new approach in public economics in a decentralized finance setting by using distributed optimization techniques for the planning of inter-regional and intra-regional public works/services for multiple regions each one with its own budget, natural and population characteristics. The goal of this study is to provide a toolkit for the planning of vast public works/services in an optimal way across the regions in order to improve the welfare of their respective populations. The proposed optimization approach can assist the government regarding its policy making for the public infrastructure, e.g., in the prioritization of the various public units across regions and also in the optimal geographical allocation of them. We will interpret the problem as a utility maximization problem and we will calculate the Marshallian demand for the public infrastructure.