Public Goods, Redistribution and Rent Seeking

Public Goods, Redistribution and Rent Seeking

The Locke Institute series

Gordon Tullock

Gordon Tullock, eminent political economist and one of the founders of public choice, offers this new and fascinating look at how governments and externalities are linked. Economists frequently justify government as dealing with externalities, defined as benefits or costs that are generated as the result of an economic activity, but that do not accrue directly to those involved in the activity. In this original work, Gordon Tullock posits that government can also create externalities. In doing so, he looks at governmental activity that internalizes such externalities.

Chapter 3: More on Why Government?

Gordon Tullock

Subjects: economics and finance, public choice theory, politics and public policy, public choice


So far we have talked about externalities and a general position that calls for government action with a real or implied threat of force has been presented, but no real reason why the threat of force is necessary. In practice, of course, externalities of a minor sort are frequently dealt with informally without any government activity at all. The termites, which I mentioned earlier, had no government connection, but there are places in the world where legal action to compel people to keep termites under control is the solution selected. Laws against insect pests, which require landowners to keep their land free of some particular species, are not unknown. This is more common with disease carriers than with termites. Nevertheless, this use of government is not rare. But if sometimes we do use government control, the question is why? It cannot be simply that the government control is used for important matters and informal control for unimportant because some areas where government control is used are not very important. In most American cities if we go to the part where there are individual homes, there will be a building line. This is a rule that all houses must be a certain distance back from the street. Clearly this is not an important matter, although it is obvious that most of the householders will favor it. The use of a single color brick as in my condominium in Tucson is generally favored by the householders, but is a private arrangement not...

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