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Public goods can’t be based on solo actions

In a recent Saturday Monitor column, David Mpanga offered a simple yet commonsensical explanation for the causes of, and solutions to, the problems our country faces.

At the risk of caricaturing his argument, Mpanga suggested that we all contribute to the problems we face, so we should all contribute solutions by taking the right actions, however small and varied.

But this assertion misses something crucial, to which I return below. Needless to say, Mpanga is one of our finest lawyers with a commendable public interest worldview.

Along with a few other lawyers, he will perhaps be best remembered for his intrepid defence of former FDC leader, Dr Kizza Besigye, when the government turned institutions for criminal prosecution into instruments of political persecution.

His method included incisive cross-examination of then CID director, Elizabeth Kutesa, in 2006 during the monstrous rape case [as retired judge John Bosco Katutsi put it] against Besigye. It will go down in the annals of Uganda’s judicial history as arguably the most memorable court proceeding.

In suggesting that the change we want starts with everyone, Mpanga is mostly right. In practice, though individuals generally pursue more private interests than public goods, it is difficult to achieve public goods through each person’s good actions.

In a seminal study, the economist Mancur Olson called this the problem of collective action. Public goods such as well-paved roads, a garbage-free environment, well-lit streets, less traffic jam, relaxation parks, organised public transport, etc., are desired by many yet in equal measure, most people would rather have them at no direct personal cost.

Given a choice, the average person prefers a free-ride, meaning incurring no cost, in enjoying public goods and services. This is because most public goods have what economists call ‘jointness of supply,’ meaning consumption or use by one member of the public does not diminish the supply of the same good or service to others.

With the exception of so-called VIP movement, no motorist can be denied access to a road simply because another person is using it. Similarly, a well-lit street does not benefit one person to the exclusion of others, and a less congested city does not benefit some people and not others.

In other words, public goods once in place are available to everyone. But precisely because they are available to all, rational beings shirk or defect from contributing since participation in producing them is not a prerequisite for enjoyment. How then do selfish individuals overcome collective action problems and cooperate in producing public goods?

Well, you need organisations that can coordinate actions of desperate individuals but also institutions that grant rewards to some individuals and dispense punishments or sanctions to others. Olson understood this as creating a system of positive and negative selective incentives. Positive incentives mean rewards while negative incentives denote sanctions or punishments.

But this still begs the question: who creates such systems and institutions that reward those who cooperate and punish those who shirk? In other words, building institutions that supply public goods is as much a collective action problem as providing the goods themselves. There are two alternative answers. First, selfless individuals like Mpanga can act ‘irrationally’ and start an organisation or institution without considering the extent of direct personal benefit.

They can then signal to others that contributing to that organisation or institution grants one access to certain benefits, while not contributing precludes you. This logic applies mostly to membership associations, lobbies, cartels, etc., where collective benefits have limited jointness of supply. These benefits are club-goods, available to club-members, and not to the entire public.

The second and broader solution is to create public authorities charged with providing public goods. Economists do a poor job in explaining how public authorities and institutions that provide public goods are created. Political scientists are more convincing in that regard; but this is not the place to talk political science, as the reader might easily get bored, so I demur.

The point, though, is this: you cannot achieve provision of crucial public goods and services by counting on the good-will actions of isolated and dispersed individuals, without a system of rewards and punishment, broadly conceived. It has never happened anywhere and is unlikely to happen in Uganda. Given chance, perhaps a tiny minority of Ugandans would voluntarily pay tax yet we all want paved roads.

That is why you need URA to enforce tax payment. With an effective URA in place, the real challenge then is how to ensure that tax collections give us paved roads, a clean and less congested city, and all those public goods and services that we desire. The real collective action problem, therefore, is to collectively demand for accountability and ensure efficient resource utilisation. Idealists like Mpanga (I share his idealism) can do all the right things separately, but we cannot achieve collective goods acting individually.

One day, I carried garbage in the car all-day because I could not find the appropriate place to dispose. My spouse wondered if my sole act of not dumping anywhere, as many do, makes any difference. I said it didn’t but reasoned that this ‘irrational’ act was borne of personal conviction to do right regardless of what others do. So? She asked, and I had no answer. If my right action is to count, other people’s cooperation is a must.

moses.khisa@gmail.com

The author is a PhD candidate in Political Science at Northwestern University, Evanston/Chicago-USA.

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