in australia, public education is not a public good but it has external effects. explain?

Answer 1

A public good is something that cannot be provided through the market mechanism, such as defence or clean air. If these were provided privately, other people who do not pay for them would necessarily get the benefits. In that sense education is not a public good, you could have all schools on a fee-paying basis much as America does colleges. It would then be a separate question whether to subsidise PEOPLE with e.g. vouchers to go to school thay don't choose to pay for, much as some countries pay, to the unemployed, housing benefit cheques so they can pay their rent.


Universality of education has the effect that decision-takers assume that everyone can read, write, and add up (at least with a calculator). Most propaganda, advertising, consumer information in shops, safety information, and packaging, for examples, is based on the perception that nearly everryone can read English. Ask anyone who is blind or partially-sighted if you doubt this. Similarly, people's interface with offcialdom is based on the assumption that we can all fill up forms in writing. Anyone applying for a job is presumed to be able to write their name, address, phone number and so on. Likewise all use of email and the web assumes people can write.

Speak with people from India or Indonesia if you want to discover how different a society is where the prevalent assumption is that a significant number of people do not read or write their own language.

Answer 2

A good does not need to be public in order to have an externality (consider mobile-source pollution as an externality of automobiles, a private good).

For the first part, remember the definition of a public good, in particular what makes something a public good.