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This week I have not really had time to think about what I need to say. We really need to delve into what a public good is. Once we have a few basic ideas, we can look at how things really work.

I also need to state that my view point is that of the U.S. system of government. This makes a difference in our discussion of public policy. We live in a capitalistic society with a democratic republic. These principles will steer our us in our journey through economics in public policy.

Finally, economics are frequently not inlcuded in policy discussions. This means that we can look some issues from a different perspective. We will probably be introduced to some side issues such as accountability and public financial management.

I will search for some issues that can commonly be discussed that are current events to help carry us through our journey by illustrating the ideas we will touch. Until next week.

What is government?

Before we can explore the economics of public policy further, we need to understand government. What is government?

Often you hear people saying government should be run more like a business. There is a distinct difference between the objectives of a business and a government. A business exists to produce and sell goods and services in the market creating a profit for its owners. A government provides goods and services to its citizens that generally cannot be provided through market forces. Citizens involuntarily provide the revenues necessary to provide goods and services through taxes and fees.

Governments provide public goods. Public goods can be thought of as those goods and services that cannot effectively be provided by the market (e.g. police and fire protection, national defense, civil law, and a myriad of others). Once police protection is provided everyone shares in it equally whether they pay for it or not. This is an example of a pure public good. The idea of a public good is one of the challenges we will be examining in looking at economics as public policy.

Public finance is the study of government budgeting of revenues and expenditures. You could say this is microeconomics for governments. This will be part of our look at economics as public policy as well.

I have been slow in doing anything with this site but I will try to post something at least once a week. This discussion is meant more for regular citizens who have not been exposed to many of these ideas or views on public policy. Feel free to comment.