This note deals with the optimal provision of a public good in the context of the Ramsey tax model. It is shown that the second-best level of public good provision is inefficiently low relative to a situation where additional expenditures can be financed by lump-sum taxation.

This note deals with the optimal provision of a public good in the context of the Ramsey tax model. It is shown that the second-best level of public good provision is inefficiently low relative to a situation where additional expenditures can be financed by lump-sum taxation.