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.

Chapter 1: Public Goods: A Positive Analysis

Inge Kaul

Subjects: economics and finance, public sector economics

Extract

* Inge Kaul INTRODUCTION Although the literature on public goods is extensive and diverse, it shares a standard definition of public goods. According to that definition, public goods have two main properties: non-rivalrousness in consumption and non-excludability of benefits. These properties, it is commonly argued, entail that the goods are public in consumption, that is, available for all. However, markets do not provide efficiently goods with such characteristics. The fact that markets fail is seen to justify state intervention. Consequently, mainstream theory often refers to public goods also as state-provided goods. This chapter takes a somewhat different approach to conceptualizing public goods. It presents a positive analysis aimed at clarifying three main questions. The first question concerns the properties of goods that are de facto public in consumption, that is, actually in the public domain and available for all to consume. How can they be characterized? What are the factors contributing to their publicness? Put differently, the issue is whether and to what extent non-rivalrousness and non-excludability are indeed predictors of a good’s publicness in consumption. This issue will be discussed in the first section of this chapter. The second question asks whether and to what extent publicness in consumption is a predictor of state provision. To clarify this aspect of the standard definition, the second section describes how public goods emerge, notably the actors involved in this process and the coordination mechanisms, policy tools or other instruments employed. Considering the importance of global...

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