Annual Budget: Services Provided by Local Government
Public goods that are nonrivalrous in consumption, means that the amount that one consumer uses does not diminish the amount available to another consumer. Making publicly provided Internet service available to all residents of a community is an example of a nonrivalrous public good because one resident using the service does not diminish the amount available to another resident. For example, Chattanooga, Tennessee’s municipally owned electric utility provides residents and businesses with Internet service of up to one gigabit per second—200 times faster than the U.S. average (Newcombe, 2013). Using Hyman’s (2021) definition of public goods and his description of their characteristics, determine which public services are provided by the local government jurisdiction under your analysis.
From the Annual Budget of your local jurisdiction
Which services would you define as pure public goods, or as close to a pure public good as you can find, that are being provided by the local jurisdiction you are reviewing?
Are there services being rationed in any particular way within this jurisdiction? If yes, describe how it is being done.
Are there services you think should be rationed? If yes, how would you propose to do it?
Sample Solution
Identifying Public Goods in [Your Local Jurisdiction]
Based on Hyman's (2021) definition of public goods, the following services provided by [Your Local Jurisdiction] can be considered pure public goods or close approximations:
- Street lighting: The benefit of street lighting is non-excludable (cannot be denied to anyone within the jurisdiction) and non-rivalrous (one person's use does not diminish its availability to others).
- National defense: National defense is a classic example of a public good, as it benefits all citizens equally and cannot be easily excluded.
- Public safety: Police and fire services are essential for public safety and are typically provided as public goods.
Full Answer Section
- Public parks and recreation: Parks and recreational facilities are non-excludable and non-rivalrous, benefiting all residents.
- Basic education: Public education is often considered a public good, as it benefits society as a whole and is typically accessible to all residents.
Rationing of Services
Are there services being rationed in any particular way within this jurisdiction?
- Please review the annual budget of your local jurisdiction to identify any instances of rationing. This could include:
- Limited availability: Certain services may be available only to a specific number of residents or during specific times.
- Waiting lists: Some services may have waiting lists, requiring individuals to wait for a certain period before receiving the service.
- Priority systems: Certain groups, such as the elderly or low-income individuals, may have priority access to certain services.
Example: A common example of rationing is the allocation of public housing. Many jurisdictions have waiting lists for affordable housing, and units are typically allocated based on factors such as income, family size, and length of time on the waiting list.
Proposed Rationing of Services
Are there services you think should be rationed?
- Consider the nature of the service and the potential for overuse or abuse.
- If a service is likely to be overused or if resources are limited, rationing may be necessary.
Example: If a public swimming pool is frequently overcrowded, the local government may consider implementing a reservation system or limiting the number of visitors per day to ensure equitable access.
How would you propose to do it?
- Consider the following rationing methods:
- Priority systems: Give priority to certain groups, such as the elderly, children, or low-income individuals.
- Quotas: Limit the number of times an individual can access a service within a given period.
- Fees: Charge a fee for the service, which can help to discourage excessive use.
- Lottery system: Randomly select individuals to receive the service.