In Chapter 3 of An Economic Theory of Democracy, the Anthony Downs suggests government services delivered to neighborhoods be measured by their utility.
All citizens are constantly receiving streams of benefits from government activities. Their streets are policed, water purified, roads repaired, shores defended, garbage removed, weather forecast, etc. These benefits are exactly like the benefits they receive from private economic activity and are identified as government-caused only by their source. Of course, there are enormous qualitative differences between the benefits received, say, from national defense and from eating mince pie for dessert. But no matter how diverse, all benefits must be reduced to some common denominator for purposes of allocating scarce resources. This is equally true of benefits within the private sector. The common denominator used in this process we call utility.
What he goes onto say is interesting as well. The reliability of government services in policing your streets, delivery your mail or making sure that potable water is shows up in your pipes should be thought of as a flow of utility income.
Using this broad concept of utility, we can speak of a utility income from government activity. This income includes benefits which the recipient does not realize he is receiving. It also includes benefits he knows he is receiving but the exact source of which he does not know. For example, many citizens are probably not aware that the water they drink is inspected by a government agency. If inspection were discontinued, they might not realize their utility incomes had fallen until they received polluted water. Even then, not all of them would know that a cessation of government activity had caused this drop in income.
He goes on to spell out a whole bunch of utility functions. But I am still back thinking about this flow of income to neighbors. Where is a the asset value that backs this benefit?
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