is a very small country, to protect one Dutch person â the Dutch queen â the system ... include unpolluted air, the ozone layer, avoidance of global warming (see ... However, this good is not non-exclusive, because it is inexpensive to charge for ..... one cannot will that everyone does so, since, as a matter of fact, most others ...
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Public Goods Kasper Lippert-Rasmussen
What Is a Public Good? A good is a public good if, and only if, it is: ●
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joint in supply: when the good is supplied to one person, it can be consumed by all other people in the relevant domain without marginal costs (in technical terms, the good is “non-rivalrous”); and non-exclusive: when the good is supplied to one person, it is either impossible or excessively costly (within some fixed legal framework) to exclude other people in the relevant domain from consuming it too.
Private goods, by contrast, are individual in supply (if a restaurant owner supplies a meal to one person, supplying meals to other customers will involve marginal costs) and exclusive (it is neither impossible nor excessively costly for the restaurant owner to refrain from serving meals to non-paying customers). Public goods raise important moral questions about the limits of the free market, and about whether individuals have a duty to contribute to the public good provision. Some important goods are public. An example is national defense. Suppose the Netherlands were to build an anti-ballistic missile system. Because the Netherlands is a very small country, to protect one Dutch person – the Dutch queen – the system would have to be able to eliminate any ballistic missile targeting any part of the Netherlands. Once such a system has been built it will, at no extra cost, protect all Dutch citizens, so the good produced by the system will be joint in supply. Moreover, the good will be non-exclusive. It is impossible to withhold protection specifically from Dutch citizens who are unwilling to pay for it. Other examples of public goods include unpolluted air, the ozone layer, avoidance of global warming (see climate change), radio signals, and the rule of the law. Semi-public goods are not public in a strict sense, but are sufficiently like public goods to raise some of the same issues as public goods. First, there are goods that are joint in supply but definitely exclusive. Take crossing the strait of Messina by driving on a bridge. If a bridge is constructed for the benefit of Sophia Loren, it will be virtually costless to make it available to many others, so the relevant good is joint in supply. However, this good is not non-exclusive, because it is inexpensive to charge for crossing the bridge. Other semi-public goods are definitely private in supply, but non-exclusive. The hunting of endangered species in former Zaire is an example. It was virtually impossible to exclude any poacher from hunting, so non-exclusivity is trivially sat-
The International Encyclopedia of Ethics. Edited by Hugh LaFollette, print pages 4211–4220. © 2013 Blackwell Publishing Ltd. Published 2013 by Blackwell Publishing Ltd. DOI: 10.1002/ 9781444367072.wbiee752
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isfied, yet each successful poacher would reduce the number of game available to others. Finally, there are goods that satisfy neither joint supply, nor non-exclusivity, but nevertheless come very close to being public goods: either because the marginal costs of supplying them to extra consumers are close to (but not) zero; or because, while it is neither impossible nor excessively costly to supply the good to one customer without making the good available to all, it remains costly to distinguish between consumers and non-consumers and only charge the former.
The Problem of Making Enough Public Goods Available When a good is a public good a decentralized market is unlikely to guarantee its provision or will lead to a supply of the good that is Pareto inefficient (Samuelson 1954: 388–9; see cost–benefit analysis). The two defining features of public goods interact to make this the case. First, the feature of non-rivalrous consumption implies that, once the public good has been provided to one, making it available to others will tend to amount to a Pareto improvement. (By definition, an allocation of goods is Pareto superior to another when, under this allocation, at least one individual is better off and no one is worse off.) Its provision will harm no one (since it costs nothing for others to consume it, and by definition their consumption does not interfere with the original consumer’s), and additional consumers of the public good will tend to benefit. To tell whether enough of the relevant good is produced, one needs a standard determining the right level of provision of the relevant public good, and while Pareto optimality may be uncontroversial it is not the only possible criterion (1954: 387). Suppose safety from theft is a public good which, when provided, benefits people who are well off much more than people who are badly off. Suppose, moreover, that instead of providing a suitable amount of safety from theft, as judged by the economic criterion, one could supply the people who are worst off with a non-public good. In that case, prioritarianism – the view that benefits are morally better the worse off the recipient is – might imply that a Pareto optimal provision of safety from theft involves an oversupply of this good, given that, alternatively, more private goods for the worst off could have been produced (see prioritarianism). Second, the non-exclusivity of public goods implies that, if a private supplier provides the good to one individual, it will have been made available to all others, each of whom then has no self-interested reason to pay for it. Non-rivalrous consumption and non-exclusivity imply that the provision of public goods often involves a prisoner’s dilemma (Hardin 1971). Imagine a twoperson population, Adam and Rosa. To each of these people the provision of a specific public good is worth four units of welfare. The total cost of providing the public good, which can be shared between Adam and Rosa or borne by either alone, is six units of welfare. Each can either pay or not pay towards the provision of the public good. The payoff scheme is now the following:
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Adam/Rosa Pay Not pay
Pay 1, 1 4, −2
Not pay −2, 4 0, 0
A problem arises if Adam and Rosa are wholly self-interested. Adam will then reason as follows: “Either Rosa will pay for the public good, or she will not. If she does, I will be better off not paying myself. That way I can enjoy the public good without contributing to its provision. If she does not, I will be better off not paying, because if I do I will have to bear the full cost of providing the public good and this is greater than the benefits I will subsequently enjoy. True, the total benefit to citizens generated by provision of the public good outweighs the cost I have to bear to provide it, but since I only care about my benefits this fact gives me no reason to pay. So whatever Rosa decides to do, I am better off not paying.” Rosa will reason about Adam in exactly the same way, of course. Since the two “players” are symmetrically located, not paying is the best strategy for both of them whichever strategy the other selects. Accordingly, the public good will not be provided. Adam and Rosa both end up worse off even though each did what was best from the point of view of self-interest. Mancur Olson has generalized this result to a many-persons prisoner’s dilemma. In general, “rational, self-interested individuals will not act to achieve their common or group interests” (1965: 2); and “common or group interests” will often include public goods. Along similar lines, Russell Hardin submits that “the problem of collective action can be represented as a game with a strategic structure similar to that of prisoners’ dilemma. The logic which prescribes that a member of a group should not contribute toward the purchase of his group collective interest is the same as that which prescribes that a player in a game of prisoners’ dilemma should defect” (1971: 479; see game theory and rational choice; rationality). While everyone might be better off if the public good is provided, this does not imply that anyone has an interest in contributing to its provision! In most cases, then, the problem of public goods appears to be that the goods are undersupplied while some people free ride on others’ contributions. Undersupply and free riding are separate problems (see free riding). If no one contributes, no one free rides, but there is undersupply. Conversely, some could do more than their share, and in that way bring about an optimal supply of the public good, while others free ride. Here, the problem is unfairness to those who do more than their fair share to provide the public good.
Solutions to the Problem of Public Goods How does one ensure that a public good is provided and avoid free riding? At least five solutions have been suggested. One is to transform the character of the relevant item so that it is no longer a public good, for example through technological advances or an expansion of private property rights. Initially, television signals were public goods; but decoders can be used to exclude non-payers, and presumably, therefore, represent a technological solution to the problems of undersupply and
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free riding. Similarly, international fish stocks come very close to being a public good; but through a quota system – say, obligating the fishing companies to buy permits to fish from an international agency – countries could, provided suitable monitoring systems are in place, turn the stocks into a non-public good and reduce overfishing. A second solution is for the state to provide the public good for free. Unlike the first solution, this approach does not alter the fact that the relevant good is a public one. In principle, the state might supply the relevant public good in a suitable quantity and then finance its provision through taxation. Relying on governments to provide wanted public goods that the free market fails to supply has problems of its own, for example bureaucratic inefficiency and vulnerability to special interests. This means that the cure of state provision is not always better than the illness of market failure. Sometimes public goods are appealed to, not to justify the state, but to explain the existence of the state. (These are different pursuits, because one can, say, give the causes of something, e.g., an unjust war of aggression, and thereby explain its existence while at the same time believing that there are no justifying reasons for it.) However, if self-interested individuals have no incentive to contribute to the provision of public goods, there is a sense in which such an explanation must fail. Benefits of the state, such as law and order, are themselves public goods, and the reasoning just indicated will show self-interested individuals that they have no reason to set up a state to provide (other) public goods in the first place, even if they would all be better off if that happened (Hardin 1997: 21). A third solution is offered by the reciprocity motive (see reciprocity). Here people are willing to contribute to the relevant public good provided that others do so in sufficient numbers. They might enjoy reciprocity, cooperate initially, and then, provided that others do so too in the right numbers, continue to cooperate, trusting each other to do so. This solution works best – and often well – in small groups, where it is easy for members to monitor whether a sufficient number of others are doing their part, and to sanction those who do not. A fourth solution is to tie private benefits to contributions to the relevant public good. One tie is generated by reputation effects. People who (are believed to) contribute to the provision of public goods may enjoy the private good of admiration. Vibrant democracy, in the sense of there being a large turnout in elections, is sometimes thought of as a public good (Brennan 2011). However, each voter has little if any incentive to contribute to this public good, since it is extremely unlikely that any individual vote will make a difference to the outcome (see paradoxes of voting). Nevertheless, people might be motivated to vote because they get the private benefit of being considered a good citizen. A fifth solution is to harness moral motivation. This involves, say, transforming the motivational structure of self-interested agents so that they are impartially motivated by benefits, regardless of whom they accrue to, and by the desire to avoid free riding. If everyone were so motivated, the prisoner’s dilemma would be transformed
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into a game in which all players share the same goal and the issue is simply to coordinate their actions to best achieve it. Often this solution is not feasible. Even if some people are impartial to some degree, self-interested motivations are hard to eradicate, and in most people the desire to avoid being a free rider is not strong.
Hart’s Principle of Fairness The remainder of this concerns the morality of public goods. Do people have a moral duty to do their part – or more than their part, if others do not do theirs – in ensuring that public goods are provided? Clearly they need not have any selfinterested reason for doing so, but presumably people are sometimes morally required to act in ways that do not serve their own interest best (see why be moral). Moreover, there seems to be a wide range of cases where doing one’s share in bringing about the relevant public good is morally required. “Free rider” signifies moral disapproval. One writer who has answered this question in the affirmative is H. L. A. Hart (1955). To explain the intelligibility of political obligation he proposes the following principle: “when a number of persons conduct any joint enterprise according to rules and thus restrict their liberty, those who have submitted to these restrictions when required have a right to a similar submission from those who have benefitted by their submission” (1955: 185; cf. Rawls 1971: 108–14). Hart’s principle of fairness implies an enforceable duty to contribute to the provision of public goods brought about through a mutually advantageous, cooperative venture. The scope of the justification is restricted. First, it does not justify an obligation in cases where no one actually takes part in a mutually advantageous, cooperative venture of bringing about the public good. Second, it does not apply if the cooperative venture takes place through spontaneous coordination involving no restriction of freedom. Finally, it implies no duty to contribute to a public good from which one does not oneself benefit. Many have objected to this fairness principle. Robert Nozick offers a counterexample: Suppose some of the people in your neighborhood (there are 364 other adults) have found a public address system and decide to institute a system of public entertainment. They post a list of names, one for each day, yours among them. On his assigned day (one can easily switch days) a person is to run the public address system, play records over it, give news bulletins, tell amusing stories he has heard, and so on. After 138 days on which each person has done his part, your day arrives. Are you obligated to take your turn? You have benefited from it, occasionally opening your window to listen, enjoying some music or chuckling at someone’s funny story. The other people have put themselves out. But must you answer the call when it is your turn to do so? As it stands, surely not. Though you benefit from the arrangement, you may know all along that 364 days of entertainment supplied by others will not be worth your giving up one day. (1974: 93)
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As, in effect, Nozick (1974: 95) acknowledges, this counterexample at best motivates a revision, not wholesale rejection, of Hart’s principle of fairness. First, in his example, while you benefit in one respect from the cooperative venture, you would be worse off, all things considered, as a result of it were you to do your part. Thus, his counterexample has no force against a version of Hart’s principle that imposes a duty on people who benefit all things considered from the relevant cooperative venture. Second, Nozick’s counterexample can be revised to accommodate the previous point. Suppose you benefit all things considered from the scheme, but you still prefer to spend your day differently – say, by campaigning for environmental protection in the Amazonas – even if this makes you worse off. It seems unclear that you have an enforceable duty of fairness to contribute. Even if you do, Hart’s principle can be revised further. It could be stipulated that it applies only on condition that one can easily, at no excessive cost, avoid enjoyment of the benefit (or can transfer an equivalent of one’s benefit to those involved in the cooperative enterprise) and refrain from contributing. Or the principle could be revised so as to concern unenforceable moral duties only.
“What If Everyone Failed to Contribute?” Hart’s principle applies only to cases where the potential contributor will herself be a beneficiary of the public good. I now turn to a justification of the duty to contribute to public goods with a pleasingly broader scope. This justification assumes that some form of universalizability – for example, conformity with Kant’s categorical imperative – can be invoked as a criterion of the moral rightness (see universalizability; categorical imperative). Suppose, then, that the criterion is that one can (in the relevant sense) will a situation in which everyone acts the way one is proposing to do oneself; and consider someone contemplating refusal to contribute to a public good. Since in the case of many public goods we cannot will such a situation, not contributing to the provision of public goods will now be morally wrong. To illustrate: if no one did anything to prevent the destruction of the ozone layer it would quickly disappear, and since this would be disastrous for everyone, it is a situation that none of us can will. This justification has considerable intuitive appeal. To most people there is something immoral about making an exception in one’s own case, and this is what one does when one acts in a way that one cannot universalize. Moreover, unlike Hart’s fairness principle, the proposal concerns moral duties as such, whether they are enforceable or not. It promises to justify a duty to provide a public good even when one does not oneself benefit from the public good (but many others do: when asking whether I can will a situation, I do not answer this question only on the basis of how this will affect my self-interest). It also seems to ground that duty in situations where it is not the case that others are already involved in a cooperative venture to bring it about. Finally, the moral requirement to contribute does not
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require the public good to be one secured through cooperation regulated by enforceable rules. Despite its attractions, the universalizability-based justification faces some difficult challenges. First, some deny that non-universalizability is a sufficient condition of wrongness. Presumably it is not a moral objection to becoming a firefighter that one cannot will that everyone does so, since, as a matter of fact, most others will not become firefighters. Similarly, it might be morally very bad if nobody contributes towards the provision of a public good. But if in fact a sufficient number of people will contribute, it is no moral objection to my not contributing that it would be very bad, morally speaking, if none were to contribute. Second, to apply the criterion of universalizability one must first categorize, or describe, the act, and since a number of descriptions are bound to be available one needs to know which of these should be fed into the criterion (Lyons 1965). Thus it makes a difference whether one’s non-contribution is described as the act of not contributing to a public good, period, or as the act of not contributing to a public good when one knows that others will contribute sufficiently. One and the same act may be universalizable on the second description, but not on the first. The feeling that some descriptions are casuistic advances matters little, for the question then becomes: casuistic in what sense?
“It Makes No Difference Whether I Contribute or Not” Finally, I consider a justification for the non-existence of a general duty to contribute to public goods that is often employed. The idea is that one has no moral duty to perform a costly action when no one else benefits from one’s doing so. Often, with a public good, each contributor appears to be in a position to respond in this way. For example, it seems to make no difference to global warming whether I limit my greenhouse gas emissions. In his defense of utilitarianism J. J. C. Smart discusses an example of this sort given by Richard Brandt (see utilitarianism). Consider a French “utilitarian in wartime England,” where there is a governmental request that a maximum of 50°F should be maintained in homes, so as to conserve gas and electricity. A utilitarian Frenchman who is resident in England might conceivably reason as follows: “It is very unlikely that the vast majority of Englishmen will not comply with this request. But it will do no harm at all if a few people, such as myself, live in a temperature of 70°F. And it will do these few people a lot of good for their comfort. Therefore the general happiness will be increased by my using enough electricity and gas to make myself comfortable.” (Smart 1973: 57)
Utilitarianism appears to imply that this Frenchman is morally permitted to free ride – an implication that seems unacceptable.
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Smart proposes a theoretical solution to the problem suitable for a society of actutilitarians. Each of us should enter a lottery. One is permitted not to contribute to the relevant public good if, and only if, one draws a winning ticket. The probability of drawing that ticket should correspond to the ratio of non-contributors to contributors that is optimal from an act-utilitarian point of view. Assuming that many people engage in the lottery, the law of large numbers will mean aggregate welfare is almost certain to be maximized. And people who are not act-utilitarians can agree that if everyone acts in accordance with the outcome of such a lottery, no one will ride freely, and unfairly, on the efforts of others, because everyone willingly accepted the same risk of contributing. As Smart concedes, this is at best a theoretical solution. To conduct the lottery many persons need a lot of information and, in any case, most of us are not act-utilitarians. Can anything else of interest be said at this point? First, where many public goods are concerned it is strictly speaking false that one person’s omission to contribute makes no, as opposed to an imperceptible, difference to the relevant public good. My driving does raise the level of air pollution in my city, even if this is hard to measure. Arguably, one may act wrongly by causing such harms (Glover 1975: 171–90). Second, in a discussion of the morality of sets of acts, Parfit imagines a case where “X and Y simultaneously shoot and kill me. Either shot, by itself, would have killed” (1984: 70). Clearly, we would not be inclined to exonerate X and Y simply on the basis that each can truthfully state, “It would have made no difference had I not shot the victim.” Parfit suggests: “Even if an act harms no one, this act may be wrong because it is one of a set of acts that together harm others. Similarly, even if some act benefits no one, it can be what someone ought to do, because it is one of a set of acts that together benefit people” (1984: 70). This view, applied to public goods, implies that non-contributors can act wrongly, even when each non-contribution does not make the situation worse, because the set of acts of non-contribution harms people. Thus, one might act wrongly by emitting greenhouse gases even if it would make literally no difference to global warming if one refrained from doing so (1984: 75–8). On the other hand, Parfit’s principle fails to show that Brandt’s Frenchman acts wrongly when the vast majority of Englishmen comply with the governmental request, since ex hypothesi the set of acts comprising the Frenchman’s noncontribution and the contributions of the vast majority of Englishmen is optimal. See also: categorical imperative; climate change; cost–benefit analysis; free riding; game theory and rational choice; paradoxes of voting; prioritarianism; rationality; reciprocity; universalizability; utilitarianism; why be moral REFERENCES Brennan, Jason 2011. The Ethics of Voting. Princeton: Princeton University Press. Glover, Jonathan 1975. “It Makes No Difference Whether Or Not I Do It,” Proceedings of Aristotelian Society, suppl. vol. 49, pp. 171–90.
9 Hardin, Russell 1971. “Collective Action as an Agreeable n-Prisoners’ Dilemma,” Behavioral Science, 16, pp. 472–81. Hardin, Russell 1997. “Economic Theories of the State,” in Dennis C. Mueller (ed.), Perspectives on Public Choice. Cambridge: Cambridge University Press, pp. 21–34. Hart, H. L. A. 1955. “Are There Any Natural Rights?” Philosophical Review, 64, pp. 175–91. Lyons, David 1965. Forms and Limits of Utilitarianism. Oxford: Oxford University Press. Nozick, Robert 1974. State, Anarchy, Utopia. New York: Basic Books. Olson, Mancur 1965. The Logic of Collective Action. Cambridge, MA: Harvard University Press. Parfit, Derek 1984. Reasons and Persons. Oxford: Clarendon. Rawls, John 1971. A Theory of Justice. Cambridge, MA: Harvard University Press. Samuelson, Paul A. 1954. “The Pure Theory of Public Expenditure,” Review of Economics and Statistics, vol. 36, pp. 387–9. Smart, J. J. C. 1973. “An Outline of a System of Utilitarian Ethics,” in J. J. C. Smart and Bernard Williams (eds.), Utilitarianism: For and Against. Cambridge: Cambridge University Press, pp. 3–74.
FURTHER READINGS Arneson, Richard 1982. “The Principle of Fairness and Free-Rider Problems,” Ethics, vol. 92, no. 4, pp. 616–33. Buchanan, James M. 1965. “An Economic Theory of Clubs,” Economica, vol. 32, pp. 1–14. Cowen, Tyler (ed.) 1992. Public Goods and Market Failures. New Brunswick, NJ: Transaction. Hardin, Garrett 1968. “The Tragedy of the Commons,” Science, vol. 144, pp. 245–66. Hardin, Russell 1982. Collective Action. Baltimore: Johns Hopkins University Press. Ostrom, Elinor 1990. Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge: Cambridge University Press. Parfit, Derek 2011. On What Matters, vol. 1. Oxford: Oxford University Press. Sinnott-Armstrong, Walter 2005. “It’s Not My Fault: Global Warming and Individual Moral Obligations,” in Stephen Gardiner, Simon Caney, Dale Jamieson, and Henry Shue (eds.), Climate Ethics: Essential Readings. Oxford: Oxford University Press, pp. 332–46. Thinggaard Svendsen, Gert 1998. Public Choice and Environmental Regulation. Cheltenham, UK: Edward Elgar.
