<p>Public goods would not be provided privately at all because of the free-rider problem. Private goods with positive consumption or production externalities are just <em>under</em>provided in markets, so subsidizing them can be sufficient to maximize welfare.</p>

CC BY-SA 4.0
2024-09-17T15:16:36.837Z
I was not completely clear. I am wondering why public goods are generally directly provided while goods with a positive externality are generally subsidized.
ZyzotPerplex
CC BY-SA 4.0
2024-09-17T16:40:48.857Z
@ZyzotPerplex, doesn't my answer already answer this? Public goods are not provided privately, so the government generally provides them directly instead. Goods with positive externalities are generally underprovided, so they are generally subsidized. Both is done to increase welfare.
VARulle
CC BY-SA 4.0
2024-09-17T11:47:26.860Z
2024-09-17T11:47:26.860Z
VARulle
<p>Public goods and goods with positive externalities are closely related. However, the policy solution to public goods generally seems to be the government provision of the good (e.g., national defense, fire departments, national statistics, etc.). Alternatively, goods with positive externalities, but that don't satisfy public goods, are often subsidized (education, R&amp;D, vaccines, etc.).</p>
<p>Why is it that public goods are generally directly provided while goods with positive externalities are generally subsidized?  Is there some theoretical reason this would generally be the case?</p>

CC BY-SA 4.0
2024-09-17T08:46:36.290Z
Why doesn’t education, vaccines etc. satisfy as public goods?
Johan
CC BY-SA 4.0
2024-09-17T15:30:58.560Z
@Johan public goods by definition must be non-excludable (meaning it’s very costly to exclude people from using them like building a wall and manning it around whole Amazon rainforest would be practically impossible) and non- rivalrous. Education is both rivalrous (when schools do not have excess capacity), and people can be easily excluded from campus. So education is not public good but private good. Vaccine is even better example of private good because not only it’s easy to exclude people, vaccines are always rivalrous in consumption
1muflon1
CC BY-SA 4.0
2024-09-17T18:38:49.020Z
@1muflon1 cheers. Don’t you need a qualifier then? Private education is not a public good whereas public education is a public good. And it depends on the country/state. Etc?
Johan
CC BY-SA 4.0
2024-09-17T20:10:48.490Z
@Johan nope, both private and government provided education are private goods. Calling government provided education public good is a misnomer. Its like when companies call fresh squeezed juice 'chemical free' when clearly even if there are no additives the orange juice itself is a mix of various chemicals (e.g. it contains hesperidin, narirutin etc). A government run school is an example of private good provided by government, similarly to juice being just mix of bunch of chemicals, but in regular speech words are often not used with the same rigor as in science
1muflon1
CC BY-SA 4.0
2024-09-17T20:22:13.453Z
@1muflon1, strange, I thought differently about it: Once the state provides public education, a child cannot be excluded from entering, and that child’s attendance does not diminish the availability of the school to other children. I thought.
Johan
CC BY-SA 4.0
2024-09-17T20:24:50.280Z
@Johan no the children can be physically excluded. When we talk about non-excludability we discuss physical difficulty of making good excludable. Not really about any legal issues. Next, it is non-rivalrous only if classes are below optimum capacity. If adding one more kid to the class reduces the quality of education or if new class has to be open it is rivalrous.
1muflon1
CC BY-SA 4.0
2024-09-17T20:32:00.727Z
@1muflon1, sorry, this might be super offtopic and I might be super annoying. Given that definition, what possibly can qualify? We can think of the state as a public good, but only if noone can get kicked out or taken their citizenship. … anyhow, thanks for providing food for thought. I imagine some political scientists out of e.g. the Rochester school may think differently about this.
Johan
CC BY-SA 4.0
2024-09-17T20:44:21.180Z
@Johan lots of things qualify, national defense (strategically its important not to just cede some ground to enemy regardless of any legal consideration), national parks (too expensive to wall them off and man the walls with police), big lakes, seas, uncongested roads that have many connections as opposed to roads that don't (so again its impractical to build too many toll stations). Throwing kid out of school is cheap, most schools have security anyway. There are only few entrances to monitor. The class is already being overseen by teacher.
1muflon1
CC BY-SA 4.0
2024-09-17T20:57:54.290Z
In my reading of public choice, all this, including education and state funded vaccine programmes, comes down to state/govt formation and public goods problems :-) but I hear you, will think about it.
Johan
CC BY-SA 4.0
2024-09-18T04:00:42.093Z
This is a very interesting question. However, I do wonder to what extent is your impression true empirically; that is, govt provides public goods but subsidizes goods with positive externalities. Do you have any reference that back this up?
Herr K.
<microeconomics><public-economics><externalities><public-goods>
Why are public goods directly provided by the government while positive externalities are subsidized?
ZyzotPerplex
# Why are public goods directly provided by the government while positive externalities are subsidized?

(Asked by: username_0 on 2024-09-17)

Public goods and goods with positive externalities are closely related. However, the policy solution to public goods generally seems to be the government provision of the good (e.g., national defense, fire departments, national statistics, etc.). Alternatively, goods with positive externalities, but that don't satisfy public goods, are often subsidized (education, R&D, vaccines, etc.).

Why is it that public goods are generally directly provided while goods with positive externalities are generally subsidized? Is there some theoretical reason this would generally be the case?

**Tags:** microeconomics, public-economics, externalities, public-goods
> **Comments:**
> **username_1**: Why doesn’t education, vaccines etc. satisfy as public goods?  
> **username_2**: @Johan public goods by definition must be non-excludable (meaning it’s very costly to exclude people from using them like building a wall and manning it around whole Amazon rainforest would be practically impossible) and non- rivalrous. Education is both rivalrous (when schools do not have excess capacity), and people can be easily excluded from campus. So education is not public good but private good. Vaccine is even better example of private good because not only it’s easy to exclude people, vaccines are always rivalrous in consumption  
> **username_1**: @1muflon1 cheers. Don’t you need a qualifier then? Private education is not a public good whereas public education is a public good. And it depends on the country/state. Etc?  
> **username_2**: @Johan nope, both private and government provided education are private goods. Calling government provided education public good is a misnomer. Its like when companies call fresh squeezed juice 'chemical free' when clearly even if there are no additives the orange juice itself is a mix of various chemicals (e.g. it contains hesperidin, narirutin etc). A government run school is an example of private good provided by government, similarly to juice being just mix of bunch of chemicals, but in regular speech words are often not used with the same rigor as in science  
> **username_1**: @1muflon1, strange, I thought differently about it: Once the state provides public education, a child cannot be excluded from entering, and that child’s attendance does not diminish the availability of the school to other children. I thought.  
> **username_2**: @Johan no the children can be physically excluded. When we talk about non-excludability we discuss physical difficulty of making good excludable. Not really about any legal issues. Next, it is non-rivalrous only if classes are below optimum capacity. If adding one more kid to the class reduces the quality of education or if new class has to be open it is rivalrous.  
> **username_1**: @1muflon1, sorry, this might be super offtopic and I might be super annoying. Given that definition, what possibly can qualify? We can think of the state as a public good, but only if noone can get kicked out or taken their citizenship. … anyhow, thanks for providing food for thought. I imagine some political scientists out of e.g. the Rochester school may think differently about this.  
> **username_2**: @Johan lots of things qualify, national defense (strategically its important not to just cede some ground to enemy regardless of any legal consideration), national parks (too expensive to wall them off and man the walls with police), big lakes, seas, uncongested roads that have many connections as opposed to roads that don't (so again its impractical to build too many toll stations). Throwing kid out of school is cheap, most schools have security anyway. There are only few entrances to monitor. The class is already being overseen by teacher.  
> **username_1**: In my reading of public choice, all this, including education and state funded vaccine programmes, comes down to state/govt formation and public goods problems :-) but I hear you, will think about it.  
> **username_3**: This is a very interesting question. However, I do wonder to what extent is your impression true empirically; that is, govt provides public goods but subsidizes goods with positive externalities. Do you have any reference that back this up?  

---

## 1 answers

### Answer by username_4 on 2024-09-17. Score: 1

Public goods would not be provided privately at all because of the free-rider problem. Private goods with positive consumption or production externalities are just *under*provided in markets, so subsidizing them can be sufficient to maximize welfare.

> **Comments:**
> **username_0**: I was not completely clear. I am wondering why public goods are generally directly provided while goods with a positive externality are generally subsidized.  
> **username_4**: @ZyzotPerplex, doesn't my answer already answer this? Public goods are not provided privately, so the government generally provides them directly instead. Goods with positive externalities are generally underprovided, so they are generally subsidized. Both is done to increase welfare.  

---

