Public Goods & Collective Action Flashcards
Why are public goods important in politics?
The concept of public goods, as opposed to private goods, can draw a dividing line between the domains of public activity and those of private concerns
What types of goods are there?
- Public or Collective Good
* Private Goods
What are public goods?
- Collective good
- An indivisible “thing” that is supplied jointly to all potential users
- Lighthouse
- In a sense, something that member of a community want but cant attain by their own individual means
- 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
- Cooperation or coercion(taxes), whether by means of collective action or effective government(convince to contribute), is necessary for the provision of public goods
What types of public goods are there?
- Network
- Pure
- Rival
- Common Goods
What are network public goods?
- They can give higher benefits to each user the higher the number of users
- Language, weights and measures, currencies, the internet
- They can be provided without significant institutional problems
What are pure public goods?
- They can be used by more person without reducing anyone else’s utility
- Fireworks, national defence, advances in knowledge
- They can be provided in the amount desired by the potential users, by appropriate institutional means
What are rival public goods?
- “Club” goods, involving tolls or fees
- The addition of users can diminish or even eliminate the utility of other users.
- Clean air, water, roads, hospitals (emergency room)
- Rivalry can be decreased and congestion can be prevented by private provision or exclusion of some potential users
What are common goods?
- Rival or contestable public goods that are not excludable
- Clean air, water pools, fisheries, forests
- Often rely on small community’s self-government
What is the tragedy of the commons?
- Provision and maintenance of common goods may fail
- Individuals acting independently and rationally according to self interest behave contrary to the groups long term best interest
What are private good?
- A “thing” that can be used by one person: is both excludable and rivalrous
- iPad
- Rivalrous implies: I want it and you want it
What are the most general qualities of all goods?
- Rivalry
- Excludability
What are rivalrous goods?
Rivalrous goods are those which can be consumed by only one person at the same time
What are excludable goods?
Excludable goods are those for which one can at low cost prevent those who have not paid for the good from consuming it
Private goods are…
Excludable and rivalrous
Common goods are…
Non-Excludable and Rivalrous
Club goods are…
Excludable and Non-rivalrous
Public goods are…
Non-Excludable and Non-Rivalrous
What is an externality?
An externality, or the external effect of some people’s action on other people’s utility, implies the production of a public good or evil
What are the politics of public goods?
- The provision of public goods may involve redistributive competition, because people may have varied preferences for different goods
- Different people can experience different benefits and costs form public goods, up to the point of differing as to whether some of them are goods or evils
What do the demand and supply for public goods and the relative levels of public expenditure tend to expand with?
- Economic prosperity, promoting more demands of public goods
- Institutional stability, favouring collective action
- Democratic government, including leaders’ supply
- Democratic governments spend more on public goods than non-democracies because of elections (public opinion)
- Democratic government, including leaders’ supply
What is collective action?
- Participation and contribution by individual member of any interest group to the provision of public goods
- Since the provision of public goods requires coordinated, collective effort, its achievement does not depend on the cost of the goods, but on the costs of the collective action
What are the collective action requirements?
- Size of the group
- Common interest
- Group Identity
- Provision of goods
- Trust
What is important about the size of collection action groups?
- Members of small groups, can be more effective in obtaining their desired public goods than large, disperse, and heterogenous
- Small groups are simply better
What is group identity in collective action?
Territorial concentration and cultural homogeneity of individuals may favour interactions and collective action for common interests
What are examples of collective action?
- Voting
- Union membership
What is collective action dependent on?
Collective action for the provision of public goods depends on individuals decisions to participate or to abstain
What are free riders?
Someone who is able to use a public good without contributing to it
In collective action, who exploits who?
- Due to benefits and costs of collective action, small groups tend to obtain more satisfaction of their demands and ‘exploit’ large groups
- Large groups do not tend to get along - more free riders
What are voice and exit?
- Voice
- Action
- Exit
- If the cost of collective action are too high or the expectation to obtain public goods is pessimistic, people may choose “exit” = to seek an alternative provider
- Voice and exit are rival ways of action
What is loyalty in collective action?
- If exit and voice are rival ways of action, loyalty is the proverbial ‘spanner in the works’
- If loyalty is strong, exit is reduced especially where options to exit are not appealing (financial, political, poor market)
