Musgrave, Samuelson, and the Crystallization of the Standard Rationale for Public Goods

Abstract

This paper provides a narrative of the emergence of the standard textbook definition of public goods. It focuses on Richard A. Musgrave’s contribution in defining public goods as non-rival and non-excludable — from 1937 to 1973. Although Samuelson’s mathematical definition is generally used in models of public goods, the qualitative understanding of the specificity of pure public goods owes a lot to Musgrave. I argue that the evolution of Musgrave’s writings on public goods reflects his intention to justify his view of the role of the state in providing goods and services to the citizens with an argument that would be convincing to the community of American economists in the middle of the twentieth century. Musgrave’s definition highlights his life-long concern for a comprehensive, realistic and useful normative theory of the public sector.

Keywords: Richard A. Musgrave, Paul A. Samuelson, social goods, public goods, non-rivalry, non-exclusion, free riding

JEL Classification: H41, B29, B31