Externality problems endure despite elegant solutions put forward by myriad scholars. The approaches of Arthur Pigou, Ronald Coase, Garret Hardin and others face binding constraints in theory and in practice, and alternative remedies are needed to address lingering inefficiencies. Although voting is generally not a consistent source of efficient decisions, this article describes a broad class of externality problems for which voting brings individuals to internalize external costs and choose socially efficient outcomes. This practical approach to policymaking relies only on informed individuals acting in their own best interest, with no requirement for public information or additional incentives.
Anderson, David A.
"A Voting Approach to Externality Problems,"
Journal of Economic and Social Policy:
1, Article 4.
Available at: http://epubs.scu.edu.au/jesp/vol14/iss1/4