Advancing Public Goods

Advancing Public Goods

The Cournot Centre series

Edited by Jean-Philippe Touffut

The studies cover topics in the conceptualization, classification and stratification of public goods. Also examined are public institutional design, global economic institutions and partnership typologies. Individual papers address the financing, regulatory, organizational and legal aspects relating to services of general interest in Europe. The dynamics of global public good production, including monopolies, patents, scientific uncertainty and market failures, are discussed. Empirical research on the state, profit and non-profit sectors is presented. Providing numerous examples of specific public goods, the contributions also highlight the impact of macroeconomic policies on provision. The book presents a broad diversity of new approaches to global public goods within the framework of mixed economies, beyond the standard economic analysis of public services.

Introduction

Bernard Gazier and Jean-Philippe Touffut

Subjects: economics and finance, public sector economics

Extract

: public goods, social enactions Bernard Gazier and Jean-Philippe Touffut The definition that economists offer of a ‘public good’ restricts the commonsense meaning of the expression. In general, the adjective ‘public’ suggests universal accessibility and some level of state involvement. For economists, the public characteristic of a good results from its availability and allocation. In the work of Paul Samuelson in the 1950s, this broader traditional concept was formalized, so that membership in the category of public goods came to be determined by two properties.1 The first property is called ‘non-rivalrousness’: consumption of the good or service by one individual does not reduce the quantity available to others.2 The second property is ‘non-excludability’: if it is difficult or impossible to exclude from the enjoyment of a good or service any user who refuses to pay, then the good or service is termed ‘non-excludable’. With his canonical definition, Samuelson sought to answer two questions. How should one define collective-consumption goods, that is to say, goods for which there is no distinction between individual consumption and total consumption? How should one characterize the optimal allocation of the resources necessary for the production of these goods? The answers were derived from a model designed to determine the optimal allocation in an economy in which there are two kinds of goods.3 The Samuelsonian formalization of public goods forms part of the wider extension and application of theoretical economic thinking to the public domain: the economic sphere is defined...