Free «Government as Provider of Public Goods and Externalities» Essay Sample

The focus of this paper is government’s provision of environmental quality which is a public good. Majority of the economic arguments for government intervention are rooted on the idea that the marketplace can hardly deliver public goods or even handle externalities. To provide environmental quality, among other public goods, the government is obliged with making a distinction of its roles from those of the public sector in order to successfully intervene. Moreover, the government has to make priority of this plan since the demand for its involvement in serving the people is unlimited, while at the same time there is scarcity of resources. In the face of other important duties the government plays, such as protection of citizens, funding to ensure environmental quality might be overlooked. Notably, both local and national governments have responsibilities to foster efforts for a good quality environment in their jurisdictions. If at all the governments are to serve the communities’ interests, they are necessitated to be clear in their focus of provision of public goods. For public goods like better environment, it is quite hard to exclude non-payers from receiving the benefits paid for by others. Moreover, the consumption of a single individual does not diminish the consumption opportunities for the others. It is on the basis of the above stated characteristics that public goods are at the risk of being undersupplied by private firms. These private firms are on the business of maximizing returns from users of their goods or services. Moreover, it is quite challenging for the private sector to deliver the level of public goods and services that would result in the net benefits across the community and still get back the full costs incurred.

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Markedly, the government avails public goods and corrects externalities in accordance with the demands of the median voter. In such a scenario, the government’s role can be qualified to be important on the basis of the wide-ranging externalities (resulting from market failure or absence of markets), differences in demand elasticity between government and private goods and change in predilection over time in favor of public goods and services (Muller, 2003). Notably, much environmental pollution results from lack of market for the waste materials such as the case of garbage hence the government should think ahead and find ways, such as recycling, to deal with the situation. However, environmental soundness is in constant demand in society given the high level of pollution happening. To provide quality environmental to citizens, the government has to craft suitable policies and provide adequate funding for their implementation.

The government has been positioned to provide services to various special needs groups as a result of its ability to apply political pressure, thus, resulting at the anticipated policies that are perceived to be beneficial to all members of the public. Provision of befitting equality environment is inevitably costly to the government. Sobel (2001) illustrates this by documenting that in the United States, there is a positive relationship existing between political action committees addressing environmental needs and federal state spending. The similar activities of government as a distributor of wealth and income are also costly. This process involves imposition of greater taxes and transfers (spending), which have a direct impact on the citizens’ net income. However, this monetary strain is paid off through better environment which means fewer injuries, diseases, among other effects which are expensive to remedy

Leviathan and bureaucracy theories (both of which are citizen-over-state theories) avail emphasis on following, a government’s monopoly position plays a core role in supplying public goods. According to the bureaucracy theory, government bureaucrats are solely focused on maximizing the size of their agencies. This hardly rules out the likelihood that these agencies will deliver expedient public services. However, the bureaucracy theory makes the assumption that the size of the different public agencies has a tendency of surpassing the size that would have been achieved in the event that these agencies had simply been meant to respond to the demand for public services of the median voter. This means that bureaucratic governments may have elaborate plans for environmental quality undertakings and be well staffed. Under the Leviathan theory, on the other hand, politicians are capable of increasing the size of the government by bringing together public and a number of private goods - the likes of policies resulting in personal financial gains or provision of goods which augments their likelihood of reelection. In this context, the government incorporates private groups which would benefit from better environment, such as local business community or even multinational companies.

According to citizen-over-state theories, the government remains to be the provider for public goods as well as a corrector of externalities. Resultantly, the provision of these public goods increases the size of the government. In the event that a government is exclusively in existence for the provision of pure public goods and the correction of externalities, it can then be claimed that a bigger size of the government implies higher welfare level. The government is in a position to provide public goods that are not overburdening to the citizen compared to private sector players. With environmental quality being the specific public good put on focus, for instance, the cleaning of a polluted lake by government is of benefit to many and no single person can be charged for such benefits. In the event that an owner was present, it is likely that he/she would have charged fishermen, recreational users and boaters prices that are considerably higher (Cowen, n.d.). Moreover, property rights which are well-defined help solve other environmental issues such as species preservation and land use.


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