To start with a simple case, consider the country before immigration. Suppose there is
a homogeneous population of N individuals and say that each pays a tax of T so that
revenue is NT. Each also receives a range of K government services Gk, k = 1, ..., K.
Assigning a cost of p0
k ðGk ; NÞ to each element of public provision covers the cases of
both pure and impure public goods and publicly provided private goods and implies
that government spending is P
k p0
k ðGk ; NÞ.