Public goods are those that are available to all (“nonexcludable”) and that can be enjoyed over and over again by anyone without diminishing the benefits they deliver to others (“nonrival”). The scope of public goods can be local, national, or global. Public fireworks are a local public good, as anyone within eyeshot can enjoy the show. National defense is a national public good, as its benefits are enjoyed by citizens of the state.

Global public goods are those whose benefits affect all citizens of the world. They encompass many aspects of our lives: from our natural environment, our histories and cultures, and technological progress down to everyday devices such as the metric system.

This article was prepared by Moya Chin and published in Winter issue of the IMF's Finance&Development magazine. Click here to access the article.

Source: Moya Chin, Finance&Development, Winter 2021 issue

Illustration: ISTOCK / RASTUDIO