A public good has two defining traits. It is non-excludable, meaning you cannot easily stop people from using it. And it is non-rivalrous, meaning one person's use does not reduce what is available to others. National defense is the textbook case. Clean air, street lighting, and lighthouses also qualify.

Markets undersupply public goods. If everyone can benefit without paying, few will pay voluntarily. Each person hopes others will cover the cost. The result is underprovision. Governments step in, funding these goods through taxes and providing them to all.

The boundary is not always clean. Education has public benefits but is partly excludable. Roads can be tolled, which makes them club goods rather than pure public goods. Economists argue over where to draw the line, but the core logic holds: some goods need collective action.

Key traits

• Non-excludable
• Non-rivalrous
• Free rider problem
• Often government-provided
• Distinct from common resources