Explain why public goods must be provided by the government.

A good which is non-rival and non-excludable is termed as public goods. For example: roads, parks, etc. Due to following reasons public goods must be provided by the government:

• Since these goods are non-rival i.e. consumption of one person does not affect the consumption of another person, the benefits of public good can be enjoyed by anyone without paying charges. Owing to this reason, market fails to set price for these goods. But these goods are imperative for life, so these goods should be provided by the government.
• These goods are non-excludable i.e. it is available to all and no individual can be excluded from using the good. Once these goods provided, it is difficult to exclude individuals from using it whether the individual has paid or not.
• In case of public goods market mechanism i.e. transactions between individual consumers and producers is missing. Thus, these goods must be provided by the government.