Siddharth Singh of Mint had written an article earlier on how Indian polity is trying to convert private goods into public goods. Though this should be applying not just on Indian polity but worldwide as well.
Here is an interesting case which shows how private associations in US try and convert public goods into private ones. The case is of Appalachian Mountain Club which shows that government is not the only means to address market failure:
An example is the Appalachian Mountain Club (AMC), a 501(c)3 nonprofit organization founded in Boston in 1876. The “oldest recreation and conservation organization” in America, the AMC lists its mission as “the protection, enjoyment, and understanding of the mountains, forests, waters, and trails of the Appalachian region.” The AMC focuses on the New England and mid-Atlantic areas, where its volunteers maintain 1,500 miles of trails, including in the White Mountain National Forest, which covers more than 700,000 acres in New Hampshire and Maine, and is administered by the U.S. Department of Agriculture.
AMC volunteers also help maintain the northern part of the Appalachian Trail, a wild footpath that runs more than 2,000 miles from Maine to Georgia. The association publishes trail and mountain guides, including the famous White Mountain Guide, which has gone through 29 editions since 1907. Its staff and volunteers participate in search-and-rescue missions for lost or injured hikers. It maintains shelters, campsites, and lodges, and organizes guided programs, training classes (on fishing, for example), and outdoor learning experiences for schoolchildren.
The author says most of so called public goods are used by limited people. So one can simply provide them like private goods by charging a price and keeping govt away. Actually it is not a pure private good but kind of a club good:
In reality, we observe that public goods are often produced by private interactions. The AMC is only one example. In a famous 1974 article, Ronald Coase, another Nobel Prize winner, showed how British lighthouses were in fact built and operated by private entrepreneurs in the 19th century (albeit with some help from customs agents who collected fees at the ports). Game theory later showed how social rules can evolve to promote social cooperation, which is a public good (Robert Sugden provides a good treatment). Political scientist Elinor Ostrom (yet another economics Nobel Prize winner) analyzed historical cases where common pool resources (water, forests, etc.) were regulated by spontaneously evolved rules of cooperation.
Most, if not all, public goods are “goods”— that is, desired things—only for certain groups of people. As only navigators needed lighthouses, only forest lovers want wilderness areas, trails, and mountain shelters. Private associations are thus a promising way to provide the public goods that their members desire. Getting over the free rider problem— that is, getting beneficiaries to become members and to voluntarily contribute to the production of their preferred public goods—is what economist Mancur Olson identified as the problem of collective action. In his seminal 1965 book The Logic of Collective Action, he showed that the problem is not insurmountable: an association can motivate participation by providing its members with “selective incentives” in terms of private benefits.
And this AMC is just one such case of converting public good into a private (club) good:
The AMC exemplifies the capacity of private associations to provide public goods to their members. This past summer, some 7,000 paying visitors stayed at one of the AMC’s Maine Wilderness lodges. These facilities are private goods, as there is a limit to the number of persons a bed can hold, but the wilderness around them is a public good for those who enjoy it. Lodges are accessible to members and nonmembers, but the latter have an Olsonian incentive to purchase a membership in order to get the 10–20 percent member discount. The discount on a one-night couple’s stay in a cabin makes up for a large part of an annual family membership fee. The selective incentives tied to membership don’t account for all of the AMC’s financing. While about 10 percent of the association’s annual revenues are from membership dues, close to a third come from donations. Americans are known to be great contributors to private charity. With the AMC as with other charities, the donor obtains utility from contributing to activities he likes, and from being part of a congenial fraternity.
He then writes on how AMC has tried to keep itself away from government funding and remain a private association.
Nice bit..
