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Private provision of public goods via crowdfunding §

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  • HUDIK, MAREK
  • CHOVANCULIAK, ROBERT

Abstract

For various reasons, governments sometimes fail to provide public goods. Private provision of such goods might then be used if it succeeds in overcoming three main problems: high organization costs, the assurance problem, and the free-rider problem. We argue that technologies that enable crowdfunding – the method of funding projects by raising small amounts of money from a large number of people via the internet – have enabled these problems to be overcome more readily. Such technology has lowered organization costs and enabled the employment of more efficient mechanisms to reduce the assurance and free-rider problems. To illustrate these effects, we present two case studies of private provision of public goods via crowdfunding: police services in Rockridge in Oakland, California, and the Ukraine Army.

Suggested Citation

  • Hudik, Marek & Chovanculiak, Robert, 2018. "Private provision of public goods via crowdfunding §," Journal of Institutional Economics, Cambridge University Press, vol. 14(1), pages 23-44, February.
    • Handle: RePEc:cup:jinsec:v:14:y:2018:i:01:p:23-44_00
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    Cited by:

    1. Erik Ansink & Mark Koetse & Jetske Bouma & Dominic Hauck & Daan van Soest, 2017. "Crowdfunding public goods: An experiment," Tinbergen Institute Discussion Papers 17-119/VIII, Tinbergen Institute.
    2. Ellen Loots & Diana Betzler & Trine Bille & Karol Jan Borowiecki & Boram Lee, 2022. "New forms of finance and funding in the cultural and creative industries. Introduction to the special issue," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 46(2), pages 205-230, June.
    3. Garrett R. Wood, 2019. "Crowdfunding defense," Public Choice, Springer, vol. 180(3), pages 451-467, September.
    4. Andrikopoulos, Andreas, 2020. "Delineating social finance," International Review of Financial Analysis, Elsevier, vol. 70(C).
    5. Luca Corazzini & Christopher Cotton & Enrico Longo & Tommaso Reggiani, 2021. "The Gates Effect in Public Goods Experiments: How Donations Flow to the Recipients Favored by the Wealthy," MUNI ECON Working Papers 2021-13, Masaryk University, revised Feb 2023.
    6. Luca Corazzini & Christopher Cotton & Enrico Longo & Tommaso Reggiani, 2022. "Pro-Rich and Progressive: Policy Selection and Contributions in Threshold Public Goods Experiments," Working Paper 1471, Economics Department, Queen's University.
    7. Maria Antonieta Cunha-e-Sa & Til Dietrich & Ana Faria & Luis Catela Nunes & Margarida Ortigao & Renato Rosa & Carina Vieira da Silva, 2023. "Crowdfunding vs. Taxes: Does the payment vehicle influence WTP for Ecosystem Services protection?," Nova SBE Working Paper Series wp657, Universidade Nova de Lisboa, Nova School of Business and Economics.
    8. Federica Alberti & Anna Cartwright & Edward Cartwright, 2021. "Predicting Efficiency in Threshold Public Good Games: A Learning Direction Theory Approach," Working Papers in Economics & Finance 2021-01, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    9. De Crescenzo, Veronica & Botella-Carrubi, Dolores & Rodríguez García, María, 2021. "Civic crowdfunding: A new opportunity for local governments," Journal of Business Research, Elsevier, vol. 123(C), pages 580-587.
    10. Rosolino A. Candela & Vincent Geloso, 2019. "Coase and transaction costs reconsidered: the case of the English lighthouse system," European Journal of Law and Economics, Springer, vol. 48(3), pages 331-349, December.
    11. Francesca Simeoni & Veronica De Crescenzo, 2018. "Ecomuseums (on Clean Energy), Cycle Tourism and Civic Crowdfunding: A New Match for Sustainability?," Sustainability, MDPI, vol. 10(3), pages 1-16, March.
    12. Christian Handke & Carolina Dalla Chiesa, 2022. "The art of crowdfunding arts and innovation: the cultural economic perspective," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 46(2), pages 249-284, June.

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