- The Cournot Centre series
Edited by Jean-Philippe Touffut
Chapter 1: Public Goods: A Positive Analysis
1. Public goods: a positive analysis* 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...
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