Efficiency in the allocation of common resources

Abstract

One of the most important areas of public policy is the issue of the proper allocation of public goods. When analyzing ways of providing two basic types of economic goods, we conclude that for private goods, the market is a great intermediary to provide them, while for the public good the market can't provide an offer. Specific kind of public goods age the shared resources, so the paper looks into the problems that can arise in connection with the use of common resources. The shared resources are specifically explored, and also their characteristics and factors which cause problems in their use. A special attention in the paper is devoted to the question of the way in which the state intervenes to improve economic efficiency, the processing of individual measures, which may be performed to correct the allocative inefficiency of shared resources.

Keywords

• public goods
• common resources
• state intervention
• consumer benefits
• quotas
• institutional solutions