Failures of Collective Action

A public good is one that is non-excludable, meaning you can’t easily prevent people from consuming it, and non-rivalrous, meaning one person’s consumption doesn’t significantly reduce the amount available to others. Because public goods aren’t excludable, they don’t naturally get funded in a market economy except by taxation. So the world as it exists now isn’t a great model for what kinds of public goods would exist in a Pareto-optimal world. Many such goods don’t get funded because the government is too slow, or not responsive enough, or not democratic at all, or fails to weigh stronger preferences over weaker ones – preference aggregation is a hard problem, and democratic governments are a crude attempt at it. But also, some public goods that currently exist are in a sense public bads, in the sense that they’re funded by taxes but cost more to fund than the total utility they provide.

what the current substitutes are: the good just doesn’t get supplied, or a shoddy version of it gets supplied, or there’s a centralized version but it’s a monopoly so you lose the effects of competition, or it gets supplied for reasons other than monetary payment

The only real feedback we get about which public goods are true improvements on an uncoordinated world is public sentiment after they’re funded. This sentiment is reflected to some degree in elections, but elections are laggy feedback loops and suffer from design flaws that make them imperfect arbiters of popular will. There’s also a principal-agent problem, in that there’s not much of an incentive for bureaucrats to get projects done under cost or ahead of time, so even a good that would have been worth its cost at market price can fail to be worth the cost that’s actually paid for it.

public goods commonly confused with 1. stuff that’s prosocial but probably not worth the cost 1. public goods funding != raising money for any public good – that’s just taxation. maybe a better term is “public good allocation”. 2. altruism (philanthropy). sometimes this is 1). Malaria bed nets: not (directly) a public good!

The paucity of empirical evidence means that we have to go around trying to figure stuff out from first principles. This is an attempt to do that.

Bureaucratic nightmares

The FDA, the DMV, the IRS, immigration, zoning boards, also the healthcare system but that’s harder. You have to jump through all these hoops, why, because no one’s incentivized to make it better? I mean, are they? A politician who somehow managed to reform them would be really popular, right?

still feels like something to do with “no competition”. also these are all regulators, which feel like they have to do with public bads rather than public goods.