The Italian approach to the Theory of Public Goods

The subject of needs is the centre of attention of Italian public finance scholars. The financial activity of the State is justified by the existence of collective or public needs to whose satisfaction collective or public goods and services are linked. Italian economists have studied the problems of public goods in a general context, taking into consideration concurrently both taxes and public expenditure and giving prominence to positive analysis. Italian theorists have always been far removed from the classical approach, which denies the productivity of public services, and have deemed it necessary to take into account the political context in which fiscal structures operate. Their models include the State as a major factor. Herein lies the main value of the Italian tradition in public finance, which puts in coercion into the market mechanism via State intervention.