Nature of human capital, technology and ownership of public goods

Besley and Ghatak (2001) show that a public good should be owned by the agent who values the public good the most — irrespective of technological factors. In this paper we relax their assumptions in a natural way by allowing the agents to be indispensable, and we show that the relative valuations are not the sole determinant of an optimal ownership structure but also the nature of human capital and technology matter.

► We analyze optimal ownership of public goods. ► Besley and Ghatak (2001) show that the agent who values the public good most should be the owner. ► We relax their assumptions by allowing the agents to be indispensable. ► We show that ownership structure depends also on the nature of human capital and technology.