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The term public good refers to an entity that can be utilized by an individual or society as a whole without reducing the availability of the entity for another person. A true public good cannot be excluded from anyone and is often called non-excludable.
Examples of entities in the public good are water and sewer, municipal parks, and police departments. Public goods are financed by tax dollars and can add to an area’s quality of life. It is impossible to offer a public good to just one person or group of people, and its use does not reduce its availability.
Free Rider Factor
Public goods are beneficial for all and provide services that are needed for everyone from individuals in a small municipality to a whole nation. Whether citizens pay their taxes to fund the public good or not is immaterial to their benefit from these services.
Some Exceptions to the Rule
There are some situations where a private good is a non-excludable entity. An example of this is a commercial radio station that can be accessed by anyone with access to a radio. There are also situations where a public good such as the United States Postal Service is excludable when it requires payment to send a piece of mail.
Quasi-Public
Quasi-public goods can also be a catalyst for economic development and can raise the quality of life, but as they are used, their benefit may be lowered. An example of a quasi-public good is a road system. As it becomes more used it can become worn and in need of being reconstructed, lowering the value of its service.
Innovative Public Good Projects
In governmental entities around the world, public administration has been innovating to provide elements of public good in order to elevate the quality of life and sustain the earth’s resources.
Many colleges such as USC offer publicly implemented programs that are involved with developing self-sufficient skyscrapers and more accessible transportation for all. You can learn more about USC’s online MPA degree on the website. Many of these solutions are attained through public cooperation with benefit corporations.
Benefit Corporations
Since 2008, the United States has allowed benefit corporations to exist as a hybrid solution in order to benefit the public good while allowing the corporation to make a profit on their business ventures. The numbers of benefit corporations have grown since then and span from companies such as King Arthur Flour to Kickstarter.
More Than Profit
While profit is their goal, they make beneficial and sustainable growth a priority in order to provide employment opportunities and worthwhile products and services. The difference with a benefit corporation is that their corporate purpose can also be an ethical commitment to the public good, not just to generate income for their investors. Benefit corporations still need to file as a C or S corporation. According to sources, both types of corporations require filing articles of incorporation as part of their establishment.
Now that the benefit corporation concept is legal and taking hold in the United States, expect the movement to grow in the years to come. The result will be that more corporations will pursue ethical interests in addition to their quest for profits.