Public goods and positive externalities


Posted by Rohan Samarajiva on February 8, 2011  /  0 Comments

Our research on the rubber growing industry has taken us into a terrain where there are many government services, not optimally provided, and suggestion about more government services that could be provided to further one or another objective. In this context, the article just published in Ground Views has relevance, as shown by the opening para below:

There is little value in simply reiterating complaints about government service delivery since there is an over-supply of dissatisfaction. Instead I seek to provide a set of conceptual tools that can be useful in understanding what government services are essential and why government over-extends itself in service delivery, doing too many things badly. Hopefully, this will help us structure our thinking and expectations relating to government services.

The incentives of politicians and bureaucrats are to always do more things, irrespective of need and efficiency. As long as opinion leaders and the general public also continue to demand more and more kinds of services, there will be no check on the incentives that bureaucrats have to expand their budgets, as postulated by Niskanen, and by politicians to expand the range of resource they can extract resources from.

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