Government Role in Tsunami Warnings and Global Warming Research
In several recent posts ssc proposed the government should have a role in Tsunami warning systems and research on global warming (see here and here). I agree on tsunami warning systems and somewhat agree on research on global warning.
Tsunami warning systems and research on global warming are both classic public goods, where a public good is defined as a good where, once it is produced, it is impossible to exclude those who didn’t pay for it from receiving its benefits. Once you have a warning system in place, everyone knows it will be shared by everyone. How do you warn only those people on the coast who paid for a warning system? Such goods can be underprovided by free associations. Consider trying to provide a system with private donations. A selfish person would only contribute, say $100, if the increase in the quality of the system by spending an extra $100 was worth $100 to him. He would ignore the fact that everyone else benefited from the better system. Altruism works sometimes, but it's usually better not to count on it.
The only problem with this is that all it shows is that there is a potential for constructive government action. In a sense, it assumes a benevolent efficient government that will do the right thing with the tax dollars given it. This seems a reasonably fair assumption to me for a tsunami warning system, although the usual cost overruns and corruption concerns still exist. On global warning research I’m more skeptical.
Figuring out the truth about a subject (basic research) is also a public good. Once the truth is known, it’s pretty hard to keep those who didn’t pay to discover it from knowing it as well. But it’s not always true that everyone benefits from knowing the truth. Some people have a lot invested in the global warming outcome. If it’s known that studies which get particular preliminary answers tend to get more followup dollars, then you can’t trust the answers.
Tsunami warning systems and research on global warming are both classic public goods, where a public good is defined as a good where, once it is produced, it is impossible to exclude those who didn’t pay for it from receiving its benefits. Once you have a warning system in place, everyone knows it will be shared by everyone. How do you warn only those people on the coast who paid for a warning system? Such goods can be underprovided by free associations. Consider trying to provide a system with private donations. A selfish person would only contribute, say $100, if the increase in the quality of the system by spending an extra $100 was worth $100 to him. He would ignore the fact that everyone else benefited from the better system. Altruism works sometimes, but it's usually better not to count on it.
The only problem with this is that all it shows is that there is a potential for constructive government action. In a sense, it assumes a benevolent efficient government that will do the right thing with the tax dollars given it. This seems a reasonably fair assumption to me for a tsunami warning system, although the usual cost overruns and corruption concerns still exist. On global warning research I’m more skeptical.
Figuring out the truth about a subject (basic research) is also a public good. Once the truth is known, it’s pretty hard to keep those who didn’t pay to discover it from knowing it as well. But it’s not always true that everyone benefits from knowing the truth. Some people have a lot invested in the global warming outcome. If it’s known that studies which get particular preliminary answers tend to get more followup dollars, then you can’t trust the answers.
posted by Harsh Pencil | 1/04/2005 08:23:00 PM
Excellent points, Chris.
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