Coprovision: Citizen Time and Money Donations in Public Service Provision

Recent policies to limit government spending and taxing as embodied in California's Proposition 13 and Massachusetts' Proposition 21/2 have squeezed local governments financially. With similar efforts underway at the state and federal level, the role of intergovernmental grants as a creative solution for local public service provision is diminished. The fiscal problem is further amplified by present discussions to shift program responsibilities from the federal level to state and local governments. In response to these fiscal pressures, public officials are turning increasingly to voluntary action by citizens in financing publicly provided goods and services as a means of maintaining (or even increasing) current public service levels. The coproduction literature has underscored the role of citizens' voluntary contribution of time in the production of publicly provided goods and services. While the purposes of the authors are varied, the timeliness of coproduction in today's era of fiscal constraint is a frequent theme.' If coproduction is to be viewed as an alternative to traditional methods of public service provision, then a comprehensive economic analysis is desirable. Coproduction is, in essence, a resource allocation process with potentially significant ramifications for the efficiency objectives of society; it should be subjected to the same scrutiny that public expenditure programs receive because it entails the use of scarce resources.2 From a public finance perspective, the preoccupation with the production of public services unnecessarily limits discussions to the technical aspects of the production of publicly provided goods and services. It is essential to broaden the scope of this inquiry. The more important issue is how to provide goods and services publicly. Provision entails determining what goods and services should be supplied and in what quantities as well as the method of financing those levels. Once these questions are decided then it is necessary to ask the question of how the goods and services should be produced. While the methods of provision and production are often interrelated they can and should be disentangled for analytical purposes.3