Street lighting benefits people who never signed up for a lighting subscription. Organizing it entirely through separate voluntary purchases would leave a difficult problem of who pays for something others can also use. Public provisioning creates an institution responsible for arranging the service.
Collective provision of shared benefits is one reason for public activity, but not everything publicly provided is an economic “public good.” Housing or a seat on a bus can be scarce and individually used while still being supplied through public policy.
Real cases
- The Manhattan Project: coordination at enormous human cost — Can mission achievement be separated from the legitimacy and costs of the mission?
- COTS: public capability helps build private capability — What does a market need before suppliers can finance delivery?
- Bell Labs: discovery and diffusion need different arrangements — Can the institution producing breakthroughs also obstruct their wider use?