Essays on Provision of Public Goods - Why Is It Left for the Government Essay

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The paper "Provision of Public Goods - Why Is It Left for the Government" is a great example of micro and macroeconomic essay.   The provision of public goods is a huge undertaking because of the huge amounts of resources it; requires the large number of beneficiaries involved, and the lack of a market structure to provide them in a competitive manner. Since public goods should be enjoyed by everyone regardless of their input, eliciting the participation of citizens on a free market environment is untenable because the free-rider effect would place immense costs of non-contributors.

Various macroeconomic theories help explain how the imperfections in the market justify the involvement of governments in the provision of public goods. Free-rider is a common issue in the provision of public goods in almost every economy globally. To solve such issues, governments are able to use policies that impose taxes, provide for the public necessities that cannot be left to the private sector, or privatise the provision of public goods where and when necessary, which can help fund the production and distribution of such goods, without levying heavy burdens on the individual citizen.   Provision of Public Goods: Why is it left for the Government? Societies thrive at the bare minimum, on goods and services provided freely to them or without having to pay for them individually, but collectively through taxes levied by governments and other public administrators.

Samuel Samuelson popularized the definition of public goods by terming them as being non-rivalrous and non-excludable in consumption (Samuelson, 1954). From an economic perspective, public goods cannot be found in a free market because of market failure and thus governments are charged with their provision to the general masses.

Indeed, the private sector is unable to supply public goods on their own because of their inability to coordinate their actions even when there are aware that their cooperation would produce an outcome that leads to a Pareto improvement, in which no one is harmed and at least one person benefits (Kamei, Putterman and Tyran 2015). Macroeconomic theories have been instrumental in defining and creating an understanding of public goods, explaining the market conditions that support the provision of public goods, and explaining the role of government and increasing role of the private sector is the provision of public goods.

References

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Kamei, Kenju, Louis Putterman, and Jean-Robert Tyran. 2015. "State or nature? Endogenous formal versus informal sanctions in the voluntary provision of public goods", Experimental Economics, 18(1): 38-65.

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Price, Machael E, Cosmides, Leda & Tooby, John. 2002. “Punitive sentiment as an anti-free rider psychological device”. Evolution of Human Behaviour, 23: 2003-231. Retrieved from http://s3.amazonaws.com/academia.edu.documents/8416855/10.1.1.6.6707.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1495712247&Signature=cc5EJv2DTZCAK8p3javKYNa7%2FKc%3D&response-content-disposition=inline%3B%20filename%3DPunitive_sentiment_as_an_anti-free_rider.pdf

Samuelson, P. 1954. "The Pure Theory of Public Expenditure", Review of Economics and Statistics, 36 (4): 387–389.

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