Page 791 - Krugmans Economics for AP Text Book_Neat

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Voting as a Public Good
It’s a sad fact that many Americans who are eli- no! The reason is that it is very unlikely that
gible to vote don’t bother to. As a result, their in- your vote will decide the issue, either way. If the
terests tend to be ignored by politicians. But measure passes, you benefit, even if you didn’t
what’s even sadder is that this self-defeating bother to vote—the benefits are nonexcludable.
behavior may be completely rational. If the measure doesn’t pass, your vote would
As the economist Mancur Olson pointed out not have changed the outcome. Either way, by
in a famous book titled The Logic of Collective not voting—by free-riding on those who do iStockphoto
Action, voting is a public good, one that suffers vote—you save $10.
from severe free-rider problems. Of course, many people do vote out of a
Imagine that you are one of a million people sense of civic duty. But because political nored. Conversely, small, well-organized inter-
who would stand to gain the equivalent of $100 action is a public good, in general people est groups that act on issues narrowly tar-
each if some plan is passed in a statewide devote too little effort to defending their own geted in their favor tend to have
referendum—say, a plan to improve public interests. disproportionate power.
schools. And suppose that the opportunity cost The result, Olson pointed out, is that when Is this a reason to distrust democracy? Win-
of the time it would take you to vote is $10. Will a large group of people share a common polit- ston Churchill said it best: “Democracy is the
you be sure to go to the polls and vote for the ical interest, they are likely to exert too little worst form of government, except for all the
referendum? If you are rational, the answer is effort promoting their cause and so will be ig- other forms that have been tried.”

Common Resources

A common resource is a good that is nonexcludable but is rival in consumption. An
example is the stock of fish in a fishing area, like the fisheries off the coast of New Eng-
land. Traditionally, anyone who had a boat could go out to sea and catch fish—fish in
the sea were a nonexcludable good. Yet the total number of fish is limited: the fish that
one person catches are no longer available to be caught by someone else. So fish in the
sea are rival in consumption.
Other examples of common resources include clean air, water, and the diversity of
animal and plant species on the planet (biodiversity). In each of these cases the fact that
the good is rival in consumption, and yet nonexcludable, poses a serious problem.

The Problem of Overuse
Because common resources are nonexcludable, individuals cannot be charged for their
use. But the resources are rival in consumption, so an individual who uses a unit de-
pletes the resource by making that unit unavailable to others. As a result, a common re-
source is subject to overuse: an individual will continue to use it until his or her
marginal private benefit is equal to his or her marginal private cost, ignoring the cost
that this action inflicts on society as a whole.
Fish are a classic example of a common resource. Particularly in heavily fished wa-
A common resource is nonexcludable
ters, my fishing imposes a cost on others by reducing the fish population and making
and rival in consumption: you can’t stop me
it harder for others to catch fish. But I have no personal incentive to take this cost into from consuming the good, and more
account, since I cannot be charged for fishing. As a result, from society’s point of view, consumption by me means less of the good
I catch too many fish. Traffic congestion is another example of overuse of a common available for you.
resource. A major highway during rush hour can accommodate only a certain number Overuse is the depletion of a common
of vehicles per hour. If I decide to drive to work alone rather than carpool or work at resource that occurs when individuals ignore
home, I cause many other people to have a longer commute; but I have no incentive to the fact that their use depletes the amount of
take these consequences into account. the resource remaining for others.

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