Forced rider
The forced rider problem in economics refers to the possibility that individuals may be compelled to share in the costs of public goods that they do not desire when government or other collectives provide such non-excludable goods.[1][2]
Overview
Unlike private goods, public goods are non-excludable and non-rivalrous. As a result, some people may benefit from a public good without helping to cover the costs of production. This is known as the "free rider problem".[3][page needed][4][5]
Collective payment schemes, such as taxes, have historically been used to address the free rider problem. However compulsory payments may create situations in which individuals are forced to contribute to the cost of public goods which they would not otherwise desire. This is called the "forced rider problem". Some writers have speculated that the forced rider problem might be even a bigger problem than the free-rider problem.[6][7][8][page needed][9][10][11][12]
Examples
The forced rider problem has been cited in various authors' views concerning taxation and union membership.
Taxpayers
- Pacifists being required to pay for national defense.[6][13][14][page needed]
- Environmentalists being required to pay for public works projects, such as dams, which they feel destroy the habitats of endangered plants and animals.[6]
- Some people feel it is unfair for them to pay local school taxes when they have no children in the school system.[citation needed]
Workers
If individual workers are compelled to pay union dues, then they become forced riders if they believe that they would have benefited more from self-representation.[15][16]
See also
References
- ^ Cowan, Tyler. "Concise Encyclopedia of Economics". Public Goods. Library of Economics and Liberty. Retrieved 27 February 2013.
- ^ Austrian Methodology: The Preferred Tax Type
- ^ The Encyclopedia of Libertarianism
- ^ Providing Global Public Goods[dead link]
- ^ Multipart pricing of public goods
- ^ a b c The Myth of Neutral Taxation
- ^ Bound to Be Free
- ^ Public Finance
- ^ Kennett, Patricia (2008). Governance, globalization and public policy. Edward Elgar Publishing. p. 28. ISBN 978-1845424367
- ^ Public Goods and Public Choices
- ^ User Charges for Public Services: Potentials and Problems
- ^ Ethical Dimensions of the Economy
- ^ Are Public Goods Myths?
- ^ Modern Principles of Economics
- ^ Unions and Antitrust(subscription required)
- ^ The Case of the Free Rider