Download or read book Public Expenditures and Environmental Protection written by Gunnar S. Eskeland and published by World Bank Publications. This book was released on 1999 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: Pigou's conjecture was that under costly taxation public expenditures should not reach the point where marginal benefits equal marginal costs. In the treatment here, public expenditures (and environmental protection) may provide public goods for consumption but also collective inputs for production. When the benefits are in production, the cost of funds is irrelevant. Why? Collective inputs benefit goods that are taxed, while for public goods the shadow price of funds reduces provision as if they were.