Quality of Public Goods, Public Policy and Human Development: A State-wise Analysis

Abstract

The provision of quality public goods not only addresses market failures but is also a precondition for well-functioning markets for economic growth, inclusive development and overall quality of life in the country. Government failure to adequately provide public goods can lower the quality of life and diminish public welfare. This study provides a framework to examine the role of public policy in provisioning public goods. It also examines the status of the quality of government-produced goods (GPGs) across major states in India. Finally, it explores the link of quality of GPGs to human development and income poverty in India. Without appropriate public policy intervention, the quality of a public good tends to remain low. Using a comprehensive definition of quality, we classify different types of quality attributes and identify the role of public policy in the promotion of quality. It is found that the quality of GPGs varies across the states but remains low. It is also found that a better quality of public goods would lead to higher human development and lower poverty.