ABSTRACT
This chapter describes the public goods rationale for government spending. It argues that the distinction between public and private goods is socially constructed. The distinction between what is public and what is private is as time bound and culture bound as anything. Public goods theorists assert the contrary: that certain goods have technical properties that make them best-suited for government provision. They argue that there is an objective method by which distinguish private goods from public goods; that these inherent features make it desirable that public goods should be supplied by government; and that all of this has nothing to do with furthering particular values, since the determination of what is a public good is objectively ascertainable. The chapter examines the merits of each of these arguments to see whether there is an objective way to assign some goods to the public sector and others to the private sector.
