Working Knowledge
Business Research for Business Leaders
12 Jun 2007Working Paper Summaries

Public Action for Public Goods

by Abhijit Banerjee, Lakshmi Iyer and Rohini Somanathan
In poor rural communities, public goods such as health and education services, clean water, electricity, and transport facilities are remarkably scarce. Within this picture of overall inadequacy there is considerable variation both across countries and inside national boundaries. How can these variations in public goods be explained? This paper surveys theoretical and empirical research on the characteristics of groups and the ability of members to act collectively to promote group interests. There remain many missing pieces in the public goods puzzle and there are important policy implications as a result. Key concepts include:
  • Existing models of collective action cannot fully explain the observed variations in access to public goods. The theoretical and empirical literature needs to take into account the interaction of "top-down" processes with "bottom-up" factors.
  • While overall access to many basic public goods is likely to improve in the coming years, the focus of research is likely to shift to quality differences.
  • Quality is much harder to evaluate than access, and the incentives for government bureaucrats to deliver quality will be different from their incentives for access. This will also have implications for the appropriate level of political and administrative decentralization.

Author Abstract

This paper focuses on the relationship between public action and access to public goods. It begins by developing a simple model of collective action which is intended to capture the various mechanisms that are discussed in the theoretical literature on collective action. We argue that several of these intuitive theoretical arguments rely on special additional assumptions that are often not made clear. We then review the empirical work based on the predictions of these models of collective action. While the available evidence is generally consistent with these theories, there is a dearth of quality evidence. Moreover, a large part of the variation in access to public goods seems to have nothing to do with the "bottom-up" forces highlighted in these models and instead reflect more "top-down" interventions. We conclude with a discussion of some of the historical evidence on top-down interventions.

Paper Information

Find Related Articles

Sign up for our weekly newsletter

Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.