Our Government Our Election

Objective
The role of government in providing public goods and services will be explored.

Teacher's Background Information: Foundational Reasons for Public Goods and Services?
Generally, public goods are goods that have shared consumption and are non-exclusionary. To illustrate the idea of “shared consumption” and “non-exclusionary,” consider a local park. The park allows shared consumption because many people receive the benefit from it at one time. The park is also non-exclusionary because everyone is entitled to use it.

The same logic applies to roads, sidewalks, and bridges. They are public goods. Many museums and libraries are also public goods. In Canada, most health care and the vast majority of K-12 education fall into the realm of public goods as well, though they are often referred to as public services.

Public goods and services are paid for by taxes and profits from Crown Corporations. Sometimes, the costs are offset by user fees. For example, consider public transportation. Governments invest money in public transportation. However, we also pay a fare when we board a bus. Together, the government subsidy and the user fees cover the full cost of the bus service

Because bus fares have a greater impact on low-income earners like students and seniors, certain people are able to receive discounted fares. Basing bus fares on people’s ability to pay helps ensure that even the poorest members of society have access to the same services as the well-off.

Critics, however, charge that a good is not truly public unless it is free for everyone.

According to the Henry George Foundation of Great Britain—named after the influential 19th-century social reformer—“the value of [public] services does not relate to the cost of providing them but rather to the value that would be lost if they were not provided.” Think again about public transportation. It provides an affordable means for individuals to travel to work, shop, or socialise. There is also a benefit for people who do not use the bus. More people using buses means that less cars will be on the road. Less cars means easier driving. As well, less cars mean less pollution in the air. Less pollution means better health for everyone.

As should be clear, the value of public transportation cannot be reduced to the simple cost of running buses.

Now consider other public services, such as fire and police protection, sewage and sanitation systems, and health care and education. Their value to society as a whole cannot be reduced to their financial cost. The broader context must also be considered to understand their true value

Another reason why governments provide particular goods and services is due to a concept called "market failure." Market failure exists when:

• a good or service would not or cannot be adequately provided by the private sector
  
• the risk to society is high if the private-sector provider failed

To illustrate market failure, consider water utilities. It probably would not be economically-feasible for a private-sector company to build and manage a city’s entire water system. Even if a private company took on this task, if they went bankrupt the company could just walk away, leaving the public without safe access to water. After all, private-sector companies are ultimately responsible to their shareholders. Government is ultimately responsible to each and every citizen, and accountable through the democratic process. Since the state will always be there, it is best-suited to provide certain essential goods and services.

Of course, the government does not need to provide non-necessary goods and services that can be provided by the private sector. For example, a functioning society would not be at risk if there was a collapse in the provision of pantyhose. Therefore, government does not manufacture, distribute, or sell pantyhose

Public goods and services fulfill a unique social purpose. They help create an equal, functioning, and healthy society. Further, public goods and services serve a democratic function. Every citizen is an equal owner, thus, every citizen has an equal say in how these goods and services are provided.

Procedure
1.To introduce the idea of public spending, discuss how K-12 schooling is a public good.
KEY QUESTIONS

• Are citizens unable to attend public school if they are unable to pay?
• Would that be different if school was not a public good?
• What would the short-term and long-term consequences be if education was not public, but rather based on ability to pay?

2. Using background information, discuss the concept of public goods and services. The overhead Government of Saskatchewan Public Spending can help illustrate the discussion.

3. Lead classroom reading of The Purpose of Public Spending.
KEY QUESTION
• All citizens are equal. Why must we ensure that certain goods and services are equally available to all citizens?

4. Students may research and report on the goals, benefits, and critiques of a particular public good or service. Starting points for research could include policy think-tanks, such as the Canadian Centre for Policy Alternatives and the Fraser Institute.

FURTHER EXPLORATIONS
5. To discuss some ways that public goods and services are accountable to citizens, check out Ombudsman Saskatchewan.