Public Goods & Collective Action

Question 1

Why are public goods important in politics?

Answer 1

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

Question 2

What types of goods are there?

Answer 2

• Public or Collective Good

* Private Goods

Question 3

What are public goods?

Answer 3

• 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

Question 4

What types of public goods are there?

Answer 4

• Network
• Pure
• Rival
• Common Goods

Question 5

What are network public goods?

Answer 5

• 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

Question 6

What are pure public goods?

Answer 6

• 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

Question 7

What are rival public goods?

Answer 7

• “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

Question 8

What are common goods?

Answer 8

• Rival or contestable public goods that are not excludable
• Clean air, water pools, fisheries, forests
• Often rely on small community’s self-government

Question 9

What is the tragedy of the commons?

Answer 9

• 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

Question 10

What are private good?

Answer 10

• A “thing” that can be used by one person: is both excludable and rivalrous
• iPad
• Rivalrous implies: I want it and you want it

Question 11

What are the most general qualities of all goods?

Answer 11

• Rivalry

- Excludability

Question 12

What are rivalrous goods?

Answer 12

Rivalrous goods are those which can be consumed by only one person at the same time

Question 13

What are excludable goods?

Answer 13

Excludable goods are those for which one can at low cost prevent those who have not paid for the good from consuming it

Question 14

Private goods are…

Answer 14

Excludable and rivalrous

Question 15

Common goods are…

Answer 15

Non-Excludable and Rivalrous

Question 16

Club goods are…

Answer 16

Excludable and Non-rivalrous

Question 17

Public goods are…

Answer 17

Non-Excludable and Non-Rivalrous

Question 18

What is an externality?

Answer 18

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

Question 19

What are the politics of public goods?

Answer 19

• 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

Question 20

What do the demand and supply for public goods and the relative levels of public expenditure tend to expand with?

Answer 20

• 1. Economic prosperity, promoting more demands of public goods
• 2. Institutional stability, favouring collective action
• 3. Democratic government, including leaders’ supply
     - Democratic governments spend more on public goods than non-democracies because of elections (public opinion)

Question 21

What is collective action?

Answer 21

• 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

Question 22

What are the collective action requirements?

Answer 22

• Size of the group
• Common interest
• Group Identity
• Provision of goods
• Trust

Question 23

What is important about the size of collection action groups?

Answer 23

• Members of small groups, can be more effective in obtaining their desired public goods than large, disperse, and heterogenous
• Small groups are simply better

Question 24

What is group identity in collective action?

Answer 24

Territorial concentration and cultural homogeneity of individuals may favour interactions and collective action for common interests

Question 25

What are examples of collective action?

Answer 25

• Voting

- Union membership

Question 26

What is collective action dependent on?

Answer 26

Collective action for the provision of public goods depends on individuals decisions to participate or to abstain

Question 27

What are free riders?

Answer 27

Someone who is able to use a public good without contributing to it

Question 28

In collective action, who exploits who?

Answer 28

• 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

Question 29

What are voice and exit?

Answer 29

• 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

Question 30

What is loyalty in collective action?

Answer 30

• 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)