Public Good

Plain definition

A public good is non-excludable (nobody can be stopped from using it) and non-rival (one person's use does not reduce what is left for others).

In economics

Because people can free ride, private markets underprovide public goods, so they are usually funded by taxation. Classic examples are national defense, lighthouses, and street lighting. Goods that are non-excludable but rival are common resources, not public goods.

Example

National defense protects everyone in a country whether or not they paid taxes toward it, and one citizen's protection does not reduce another's.

Common confusion

Public goods are not just goods provided by the government; the economic definition is about non-excludability and non-rivalry, while many government services (like passports) are excludable.