how public goods work
the main criteria that distinguish a public good are that it must be non rivalrous and non excludable non rivalrous means that the goods do not dwindle in supply as more people consume them non excludability means that the good is available to all citizens the point of contention is called the free rider problem a public good is available to all people regardless of whether they have paid for it some members of society use the good but are unable or unwilling to help pay for it people who do not pay taxes are essentially taking a free ride provided by those who do pay taxes national defense law enforcement and clean air and water are all examples of public goods private goods vs public goodsthe opposite of a public good is a private good which is both excludable and rivalrous private goods can only be used by one person at a time a piece of jewelry for example in some cases they are destroyed in the act of using them such as when a slice of pizza is eaten private goods generally cost money most of the goods and services that we consume or use in our everyday lives are private goods although they are not subject to the free rider problem they are also not available to everyone since not everyone can afford to purchase them in some cases public goods are not fully non rivalrous and non excludable for example a town swimming pool is a public good since it can be used by any resident but using it might involve a nominal fee similarly some goods are described as quasi public goods because although they are made available to all their value can diminish as more people use them for example a country s road system may be available to all its citizens but the value of those roads declines when they become congested during rush hour public goods around the worldevery nation makes its own decisions on which goods and services should be considered public goods and this is reflected in their national budgets for example many argue that national defense is an important public good because the security of the nation benefits all of its citizens to that end many countries invest heavily in their militaries financing army upkeep weapons purchases and research and development r d through public taxation in the united states for example the department of defense dod has a budget of 1 52 trillion equal to 12 8 of the total federal budget for fy 2023 1many countries treat essential services such as healthcare and education as a type of public good taxpayer funded healthcare is provided by nations including canada mexico the united kingdom france germany italy israel and china 2government investments in public education have grown tremendously since the 1950s according to our world in data the percentage of the world s population that has received at least some basic education has grown from about 49 in 1950 to more than 86 in 2020 the most recently available data 34advocates for this kind of government spending argue that its economic and social benefits significantly outweigh its costs pointing to outcomes such as improved workforce participation higher skilled domestic industries and reduced rates of poverty over the medium to long term critics argue that it poses a burden on taxpayers and that goods can be more efficiently provided by the private sector 