POLS1002 Lecture Notes - Lecture 4: Private Good, Club Good, Collective Action
23 May 2018
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THE PUBIC GOOD AND COLLECTIVE ACTION
- What is a public good?
- What is the difference between a public good and a private good?
- What types of public goods exist?
THE PUBLIC GOOD
• Club good – a g to be used by some people to the exclusion of others e.g. tolls for bridges/roads
• Commons – rival, or congestible, g that are not excludable and can be exhausted e.g. air
• Externality – effet of soe peoples atio o other peoples utilit, hether positie or egatie
• Network g – a g that gives higher benefits to each user the higher the no. of users e.g. languages
• Private or individual g – a divisible g that can be used individually
• Public or collective g – an indivisible g that is supplied jointly to all potential users
• Pure public g – a g that can be used by one perso ithout reduig aoe elses utilit
• Rival, or congestible, g – a g whose use by one person can diminish the utility for other people using the g.
• The D for public g and the relative level of public expenditure tend to expand with economic prosperity, institutional
stability and democratic govt.
- The concept of public goods, as opposed to private goods, can draw a dividing line between the domains of public activity
(govt.) and those of private concerns (individual citizens).
Public or Collective Good
o A idiisile thig that is supplied joitl to all potetial users e.g. lighthouse
o Non-excludable and non-rivalrous
o Ejoet doest ipede other peoples ejoet
o Jointly supplied
o Market failure
o Are indivisible and are jointly supplied to their potential users
o Individuals interested in using public goods may not have incentives to contribute to their provision because they can
expect not to be excluded from access.
o Cooperation or coercion, whether by means of collective action or effective govt., is necessary for the provision of
public goods.
o A eteralit, or the eteral effet of soe peoples atio o other peoples utilit, iplies the produtio of a
public good or evil e.g. smoke, pollution, noise
Pure Public Good
o A thig that a e used oe perso ithout reduig aoe elses utilit
o Quintessential public good → lighthouse
o E.g. lighthouse eause it ould e ipossile to harge a toll ad ho ould the reoe the good if the toll ist
payed. Can only be officially built by the govt.
Types of Public Goods
- Network goods:
o they can give higher benefits to each user the higher the no. of users e.g. languages, weights and measures, currencies,
world wide web, social media.
o They can be provided without significant institutional problems. Major institutional problem is infrastructure.
- Pure goods:
o The a e used ore people ithout reduig other peoples utilit e.g. atioal defee, adaes i koledge
o They can be provided in the amount desired by the potential users, by appropriate institutional means.
- Rival goods:
o The addition of users can diminish or even eliminate the utility of other users e.g. clean air, water, roads, hospitals
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Club good a g to be used by some people to the exclusion of others e. g. tolls for bridges/roads. Commons rival, or congestible, g that are not excludable and can be exhausted e. g. air. Private or individual g a divisible g that can be used individually. Public or collective g an indivisible g that is supplied jointly to all potential users. Pure public g a g that can be used by one perso(cid:374) (cid:449)ithout redu(cid:272)i(cid:374)g a(cid:374)(cid:455)o(cid:374)e else(cid:859)s utilit(cid:455) The d for public g and the relative level of public expenditure tend to expand with economic prosperity, institutional stability and democratic govt. The concept of public goods, as opposed to private goods, can draw a dividing line between the domains of public activity (govt. ) and those of private concerns (individual citizens). Public or collective good: a(cid:374) i(cid:374)di(cid:448)isi(cid:271)le (cid:862)thi(cid:374)g(cid:863) that is supplied joi(cid:374)tl(cid:455) to all pote(cid:374)tial users e. g. lighthouse, non-excludable and non-rivalrous, e(cid:374)jo(cid:455)(cid:373)e(cid:374)t does(cid:374)(cid:859)t i(cid:373)pede other peoples e(cid:374)jo(cid:455)(cid:373)e(cid:374)t.
