Two (lay) dogmas on externalities

Vaughn Bryan Baltzly ()
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Vaughn Bryan Baltzly: Texas State University

Public Choice, 2024, vol. 201, issue 3, No 6, 494 pages

Abstract: Abstract I argue that much current thinking on externalities—at least among “lay political economists” (but even, on occasion, among professional economists)—is saddled with two analytical errors. The first is what I call coextensivism: the conflation of public goods and externalities. The second error is what I call externality profligacy: the conflation of economic and “social” externalities. The principal dangers presented by these two “dogmas on externalities” are that, while in their grips, we are under-disposed to seek negotiated, market-based solutions (of a broadly Coasean nature) to challenges posed by economic externalities, and over-disposed to seek coercive, state-based solutions (of a broadly Pigouvian nature) to challenges posed by social externalities.

Keywords: Ronald Coase; A. C. Pigou; Externalities; Property rights; Public goods (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11127-024-01167-z

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