Local public goods: the essence and classification

Abstract

The features of local public goods in the system of economic relations of society have been revealed. The essential features and main features of public goods offered by E. Lindal, A. Pigu, P. Samuelson and R. Musgrave have been analyzed. It has been shown that the theory of public goods is aimed at explaining the causes and consequences of existing contradictions between private and public interests in the production of public goods, and also contains suggestions on the mechanism for solving these contradictions. While determining the essence of local public goods the use of methodological approach has been proposed, through the use of which the construction of the economic category occurs through, firstly, the description of the most significant aspect of the phenomenon being investigated, secondly, an explanation of how exactly the deployment of the essence of the phenomenon within a certain, clearly certain content is being done and, thirdly, clarification of what the realization of this phenomenon results in inside the economic system. A generalization of the most common approaches to the disclosure of the essence, content, as well as the result of the realization of such economic phenomena as "public good" and "local public good" that are presented in the domestic economic literature is carried out. On the basis of the critical analysis of these definitions an author's definition of mentioned related categories is given. It is proposed to consider the local public good as a set of tangible and intangible objects and facilities designed to meet collective needs in certain territorial boundaries, which are characterized by a certain combination of properties of impossibility to exclude any subject from the process of consumption and individual choice of consumption, as well as by the absence of competitiveness between consumers. On the basis of the generalization of existing approaches in economic literature, the classification of local public goods is conducted. It is proposed to supplement this classification through the feature of institutional environment for the reproduction of these goods. Those local goods that are being reproduced through formal and informal rules are highlighted among the totality of local goods.