Mmm Mmm Goods

One of the most important features of a system of property rights is excludability. That is, if I own something--a fruitful avocado tree, say--I can exclude you from eating my delicious avocados unless we come to some mutually agreeable arrangement. Because I can capture as much of the tree's benefit as I choose, I have a much stronger incentive to grow and maintain the tree than if people could pilfer the fruits of my labor at will. Some things are however non-excludable by nature, meaning that it is prohibitively costly to prevent others benefiting from them. A classic example economists have long used is a lighthouse: With a lighthouse, there's no way an owner can exclude ships from navigating by the boat-saving beam. Because free-riding would be easy, no one could ever hope to make any money from it and wouldn’t bother building the lighthouse, despite the obvious value of the service.

Non-excludability is the main feature of “public goods,” or those goods and services that seemingly can’t be produced (or aren’t produced enough) in private markets. Because public goods are still valuable, the government usually becomes their purveyor. Often public goods are nonetheless provided privately in creative ways. I happened to come across a Rwandan example last night in the book A Thousand Hills:

The two-lane highway that winds northwest from Kigali toward Lake Kivu qualifies as a fine one by African standards...It also has a feature rare in Africa and unique in Rwanda: a short stretch of it is illuminated by streetlights. At night you drive through the unbroken dark, always slowly in order to avoid hitting people. Suddenly the road is bathed in light. A couple of miles later, as you are still marveling at this wonder, it is over and you pass back into blackness.

The first time this happened to me, I wondered: Of all the highway stretches in Rwanda, why did the government choose to illuminate this one? Friends gave me a startling answer. The government did not choose this stretch, nor did it erect these streetlights, nor does it pay the electric bill. It is all Gerard Sina's work.

(...)

The reason Sina illuminated a two-mile stretch of highway is that he owns a strip of businesses there. He has a grocery store with its own bakery, a sit-down restaurant, a snack bar that offers take-out service, a motel, and a pair of clean public restrooms. It is the only highway rest stop in Rwanda. Cars, trucks, and buses are always parked out front (pp. 318-319).

Charging for streetlights is a fool’s errand, but that’s not to say compensation can’t be had—just bundle the service with things for which you can charge, like Sina did. In 19th century England, private operators tied in the lighthouse service with the port fees, to varying degrees of success.

Gerard Sina has offerings throughout Rwanda, and I enjoy very much his pili-pili, often to the exclusion of other condiments.