Government Dilemmas in the Private Provision of Public Goods Defended on Thursday, 14 October 2004

The private provision of public goods is a much debated topic, both in the academic and the real life literature. From an academic perspective, numerous potential pitfalls exist with respect to funding, willingness-to-pay, and the free rider problem. The logical solution to these problems has therefore always been government provision of public goods. In an era where governments withdraw from the market place as active providers of goods and services, however, there is a renewed interest in the private provision of these activities. This thesis takes a governmental perspective, asking how governments can encourage investments in the private provision of public goods. Since from an economic perspective the so-called coercive measures (most noteworthy: regulation) are by definition inefficient, I focus on the non-coercive measures. Therewith, a trade-off is introduced between the efficiency and effectiveness of the government interventioncoercive measures are most predictable in their outcomes, but less efficient, whereas non-coercive measures are most efficient, but less predictable. The choice for non-coercive intervention instruments yields a number of dilemmas, illustrating the complexity of the choices to be made. The four dilemmas discussed are the Influenceability Dilemma, the Smart Governance Dilemma, the Policy Portfolio Dilemma, and the Joint Ownership Dilemma.

Keywords

Private provision of public goods, government incentives, investment, corporate finance, energy economics, environmental economics, public economics, fiscal economics, incentives, subsidies, public-private partnerships