Lecture 8 POLS 207 Outline of Last Lecture Constitutional Amendments and the Commerce Clause I The Seventeenth Amendment A Undercuts Federalist argument B Introduces disconnect between state governments and the people C Article 1 8 Congress shall have the power to II The Nineteenth Amendment A Political gender gap B Diversified electorate III The Power to Regulate Commerce Commerce Clause A Great Depression New Deal B United States v Lopez Outline of Current Lecture Why Governments Provide Goods and Services to Citizens I Public goods A Non exclusion B Non exhaustion C Collective benefits D Redistributive goods E Regulatory goods Current Lecture See Halter chapter 10 199 200 for elaboration on why do governments provide some goods services to citizens Halter attempts to explain what governments do without relying on a political or process explanation Instead you can explain what governments do by focusing on the characteristics of those goods and services that governments commonly provide Halter uses the concept of public goods as a primary explanation for why governments rather than the market provide some goods and services Unusual properties of some goods and services dictate who they can be provided to or withheld from The government usually provides certain public goods because they fall into one of two categories non exclusion goods services from which you can t exclude non payers o Ex Police force military protection there would be no way to have some people subscribe to police or military protection and others not The police and Armed forces protect everyone because it s not practical to try to exclude non payers o Government typically provides these kinds of services public goods because they can be paid for with tax dollars collected from the general population That way there are no non payers and everyone has an equal right to protection non exhaustion use does not reduce supply of the good o Any number of people can consume the good service at once without reducing the amount of good service available to others Ex Fire protection One person being protected from fire outbreaks does not keep someone else from being protected at the same time Demand supply ability to price in a voluntary exchange Note the difficulty for a market provided flood control project i e a dam or levee to exclude non payers i e free riders from the benefits of the project This is one advantage of providing certain goods through the public sector because the government can tax everyone In sum the government provides a good or service when it s not practical to separate payers from non payers and exclude the non payers and the use of the service doesn t diminish someone else s ability to use the service as well POSTSCRIPTS Beyond some obvious examples concept of public goods does NOT explain very much of what governments do Most public entities can still exclude non payers i e universities electric companies etc We can start by applying what I call The Google Test If you can find a good or service on the Internet then the federal government probably doesn t need to be doing it The post office the government printing office Amtrak Fannie and Freddie were all built for a different time in our country When the private sector did not adequately provide those services That s no longer the case Quote from Tim Pawlenty June 7 2011 former governor of MN former Republican candidate for the 2012 Republican presidential nomination Implication of public goods analysis Many say that modern American governments on all levels are bigger than they ought to be because governments are providing lots of goods the market could and does adequately provide thus we have less than an optimal allocation of society s resources Why does the government do this Because of influence of politics i e elections partisanship politicians special interests legislative logrolling and pork etc Politicians promise things to their constituents and special interest groups and government just keeps growing Personal agendas of politicians come into play as well They try and allocate money to projects that are important to them Final postscript on public goods as an explanation for what governments do Modern American governments typically provide several types of goods and services There s only a handful of pure public goods A larger number of goods services having some public good ness quality to them similar to Halter s collective benefits goods and services Benefits costs of a good service are not limited to immediate beneficiaries Don t confuse what governments provide as a practical and political matter with what they must provide because of the inherent nature of some goods and services Some other kinds of public goods that the government provides that don t fall into the nonexclusion or non exhaustion categories Collective benefits aka externalities in economics benefits or costs of a good service are not limited to immediate beneficiaries o Halter definition Goods that are provided with no charge because there is a broader public benefit associated with the good Example public education It benefits an entire society not just the individuals being educated Redistributive goods transferring resources from one set of individuals to another set o Halter definition Those goods where government takes money from one group of citizens and gives it to other citizens Example Welfare Regulatory goods rationing of scarce resources o Halter definition Public goods where the government regulates the use of resources to prevent overuse Example Water rationing