Public Goods

Quick Summary of Public Goods

An exception to the free-market system marked by two characteristics. First, if one person consumes public goods, the amount available remains the same. Second, once public goods are available, no one can be stopped from consuming them for free. An example is the protection provided by police, fire departments, and the military.

Public goods, as opposed to private goods, refer to those goods and services which have the qualities of being non-rival and non-excludable. In other words, these goods and services have the following characteristics:

• The quantity of public goods is not lessened even after their consumption. The amount of the good available remains the same for all consumers.
• The cost of the good is indivisible, thus making its marginal cost zero.
• No one can be charged for these goods. No one can be excluded from availing these goods.

Economists argue about the existence of public goods in the practical world. According to some, the governmental services like maintenance of law and order or defence are examples of public goods. The consumption of these services are not charged, these are not diminished after consumption by anyone and nobody can be excluded from availing these services. Fulfilling all conditions, these services are perfect instances of public goods in the real world.

Global Public Goods

Global public goods are a type of public goods. Their specialty lies in the fact that benefits accrued from these have a global impact. Benefits from global public goods are not limited to any particular country, population group, and generation. Global public goods are part of international public goods. There is yet another sub-division of international public goods – regional public goods.

Example Of Global Public Goods

A major example of a global public good is the smallpox vaccine or any similar medication. When it is invented it is meant to be beneficial for people all over the world and people of all ages and classes. It is not invented to benefit any particular community as such.

Aspects Of Global Public Goods

The two most distinguishing aspects of public goods are nonrivalrous consumption and non-excludability. Nonexcludability means that a particular good can also be enjoyed by non-payers. It cannot be made the sole preserve of those who pay for it. Nonrivalrous competition implies that in certain cases public goods can be enjoyed by non-payers without adding to costs of production of that particular public good or affecting payers.

Cite Term

Definition Sources