The Production and Financing of Regional Public Goods

Jul 2005
The concept of public good, as defined by Musgrave, Samuelson, and others, was also largely a nationally based concept. As in the classic case of defense spending, the public good was assumed to benefit the population of a country; however, because of two technical characteristics (mainly the difficulty of excluding from the benefits that it provides those who do not pay for it; and the fact that, unlike private goods, adding other beneficiaries to the use of the public good does not reduce the benefits to current beneficiaries) it had to be financed by the government. No private individual would have the incentive to provide it.