in the US, as elsewhere, most public expenditure goes towards redistributive transfers, health and education. Table 2 shows
total government expenditures for 18 OECD countries. Most government expenditures go towards health (7 to 19 percent of government spending), education (7 to 15 percent), and ‘social protection’ programs that more directly redistribute income (19 to 45 percent).
The goods most often cited as public goods are unimportant in terms of overall government expenditure for OECD countries: defense accounts for 1 to 6 percent of spending; public order between 2 and 5 percent of spending.
Pointer from Bryan Caplan.
It is an interesting and wide-ranging essay, difficult to excerpt. Here is another:
substantial insights into the economics of non-rival goods can be gained from the analysis of clubs (for providing local goods that are non-rival but excludable), the theory of natural monopoly (for goods such as Microsoft office where there are substantial initial development costs but the additional cost of an extra Word user is (close to) zero), or the economics of information (for the development of new technologies or drugs, where the manufacture of the new drug may cost a dollar or two per user, making it close to non-rival but the drug development may cost millions). While it is interesting and useful to have a theory for the special sub-set of non-rival goods that happen to be non-excludable also, there too few such goods to justify the place such goods hold in the public economics curriculum
One point she is making is that we should not encourage students to think that the theory of public goods explains or describes the actual role of government.
Does anyone fail to make this distinction in their classrooms? I’d hope not, yet many of the major texts to not emphasize this very much. (I could not easily find it in Gruber or Rosen.)
I teach Public Finance and it is central to the introduction to my class that most things the government buys is not a public good. And, of course, many things that are public goods are not financed by the government. The text I use in my class is by Laurence Seidman. He fairly clearly makes this distinction.
With no argument with the larger point, a small sleight of hand is worth pointing out. Military spending in the U.S. is around 600 billion a year, which is a high fraction of the overall budget. The article cites overall OECD spending, but most of those countries are free riding on the U.S. military.
@Dave, I don’t know about class rooms, but in general I frequently encounter public goods arguments as the reason why libertarians are obviously crazy and not worth paying attention to. I have found this line of blog posts interesting for pointing out that such goods are in fact not the bulk of government activity in the modern developed world.
You mean wrong public goods arguments?
Bad public good arguments.
Of course, leftwingers ignore the public goods concept when it suits them. For example, a relative “explained” to me that, if it was okay for the government to build roads to accommodate cars 100 years ago, then subsidies for Solyndra and electric car companies are okay, too.
I realize that private roads are possible, but you could not have had a large enough network of private roads to make the automobile feasible.
I think the,problem is extrapolation.
Roads justify roads, but not even all roads. Driveways and parking lots are often private. Bridges are excludable which results in toll bridges