On Economists Writing Everyday yesterday, Zachary Bartsch posted how he came to support a tax to pay for mosquito spraying for nearby neighbors. His neighborhood has always been sprayed, but given the mosquitos’ lack of interest in our municipal lines, he surprised himself with a collective mindset.
At first, I wanted to write a blog about the collective action problem and how one can be comfortable with oppressing the will of electoral minorities. I expected to make a Kaldor-Hicks argument in favor the potential gain of the majority. Among free-marketers, that would be the edgy thing to do. But I realized that this referendum was fundamentally about changing our set of property rights. It’s an externality story. I am now required to pay for mosquito mitigation on my land in order to prevent the harm to my neighbor.
Some might take this as an endorsement for more government. But it’s not. It is the private benefit gained from increasing the treatment area for the pests that gives dynanism to the collective product. Money (or resources) will flow to the issue as long as there are individual gains as well as the group gains.
Hence finding the right public subset to fit each public good problem is necessary for achieving the best use of resources.