Provision of safe drinking water and electricity are recognized in law as public goods, in that these services are provided by public utilities. Efficient provision of the public good would require ~'--t MRSi= 1 and thus. Public Choice (2013) 156:31^3 DOI 1 0. Provision of clean air is a public good. A market economy is unlikely to satisfy the efficiency conditions for the supply of public good for two reasons First, many public goods are non-excludable. Efficient Provision of Public Goods With private goods consumers decide what quantity to buy for any given market price. The second problem is that the implied size of the public budget would be even higher than it was with naive contributors. Now that we have a clear understanding of the appropriate inputs and outputs when analyzing efficient provision of public goods, it remains to describe what might explain variations in efficiency across jurisdictions. The problems associated with the existing state of income distribution in any society, put a constraint on achieving allocative efficiency in the case of public goods provision. the law of diminishing marginal utility is important to the provision of public goods because _____, thus explaining the downward slope of the collective demand curve a. as is true for private goods, successive units of any good yield less and less added costs For example, defence and police services. provision of public goods. Private provision works better when: 1) Some Individuals Care More than Others: Private provision is particularly likely to surmount the free rider problem when individuals are not identical, and when some individuals have an especially high demand for the public good. For testing the theoretical modelâs implications about public goods provision in Proposition 3, we use answers to questions regarding the quality of public services such as infrastructure, health and education, security, etc., and the efficiency of the government on delivering those services as proxies. in view of (8), imply that /3 is chosen to be 1. We will return to this point in the next section. The distinctive features of public goods are, â¦ Minimization of contagious disease is a public good. Public goods are different than private goods in demand because of non-rivalry ¤ A single unit can be enjoyed by multiple individuals ¤ Benefit of having one more unit = sum of individual marginal benefits Efficient provision of public goods (non-rival/ non-excludable) 25 Lindsay â¢ William R. Dougan the efficient provision of public goods (the other is to maintain order).1 Without such provision, the economy and society will not prosper. Construction and maintenance of roads is a public good. But for /3 = 1, the above tax-subsidy scheme fails. 2) Altruism: Both national and local governments have public good responsibilities. 1 007/s 1 1 127-012-9942-z Efficiency in the provision of pure public goods by private citizens C.M. Determinants of efficient public good provision: hypotheses.