This blog post examines how the non-excludability and non-rivalry of public goods affect government decision-making in policy dilemmas.
Unlike consumer goods, which are consumed by individuals, such as food, goods and services produced for the joint consumption of many people, such as parks, are called public goods. Although the definition of public goods varies, it is not defined by the supplier, but by the nature of the goods or services themselves. Public goods have two characteristics: non-excludability and non-rivalry. Non-excludability refers to the characteristic that a specific individual or group cannot exclude the use of, and non-rivalry refers to the characteristic that one person’s consumption does not reduce the consumption of others. For example, a park is not something that can be enjoyed by one person and not be available to others; it is something that everyone can use freely.
The government’s public goods policy is intended for the public good, and there are two theories on what this public good is: substantive theory and process theory. Substantive theory regards the absolute values agreed upon in society, such as human rights, as the public good. Process theory denies the connection between the public interest and a specific entity and emphasizes the proper procedures in the decision-making process of discovering the public interest. This concept of the public interest becomes an important criterion in the policy-making process and acts as a factor that determines the direction of the policy.
If some public interests are difficult to coexist with other public interests, or if the conflicting opinions are equal even after going through the proper procedures, it is easy to fall into a policy dilemma. A policy dilemma is a situation in which a choice between two or more alternatives is difficult because the choice of one option would result in a significant loss of opportunity for the other option. If this situation continues, it will lead to delays in policy implementation and increased controversy, which will increase the overall cost to society. Therefore, governments have been constantly looking for ways to escape from policy dilemmas.
Among the various approaches to solving the complexity and uncertainty of policy-making, the rational model explains that the optimal alternative can be selected in a dilemma situation by ensuring the adequacy of the causal relationship between policy goals and means. If decision-makers are given sufficient time, budget, and information, they can review all possible alternatives and make rational decisions. However, in reality, these ideal conditions are rarely met, so actual policy decisions are often made to achieve a satisfactory outcome rather than the theoretically optimal outcome.
In contrast, the “satisfaction model” emphasizes decisions at a satisfactory level rather than the optimal level, as the situation assumed by the rational model does not occur. The rapid decision-making of decision-makers in a choice situation is seen as having a positive effect on society by removing the uncertainty of policy-making, regardless of the moral or logical attributes of the decision. It is expected that the market will play a role in efficiently allocating resources, regardless of the decision made. The satisfaction model recognizes these realistic limitations and seeks to overcome policy dilemmas through suboptimal choices rather than optimal choices.
The continuation of policy dilemmas dramatically increases the cost of society as a whole. In reality, the cost of continuing the dilemma also increases significantly because the more budget and information are available, the more time there is to consider. In this respect, the satisfaction model can be adopted as a strategy for decision makers to avoid falling into a dilemma, rather than a decision that is unavoidable due to a lack of time and budget. This is an approach that takes into account the realistic limitations of policy-making and reflects efforts to minimize social costs through quick decisions.
In conclusion, the nature of public goods and the definition of public interest play an important role in the policy-making process. Non-excludability and non-rivalry of public goods are key factors that governments must consider when establishing and implementing public goods policies to realize the public interest. In addition, in a policy dilemma situation, the rational model and the satisfaction model provide various strategies according to each approach, and through this, the government strives to find the optimal alternative. This policy-making process acts as an essential element for improving the welfare of society as a whole and realizing the public interest, and ultimately helps all citizens to effectively utilize public goods.
