What is the importance of the distinction between private goods (individual goods) and collective goods (public goods) in assessing why some interests are more highly organized than others? What type of group particularly benefits from this situation?

Question

What will be an ideal response?

Answer 1

Economic groups offer members private (or individual) incentives that benefit them directly, which is a powerful reason to join the group. An example of a private good is a benefit that a labor union member obtains through the union. Citizens' groups offer collective goods (public goods), which are goods that all people share, such as a clean environment. The fact that such goods are available to nonmembers as well as members is a disincentive for many to participate. This situation, called the free-rider problem, can plague citizens' groups. Economic groups are less affected by the free-rider problem. Economic groups also have ready access to financial resources in the form of profits or dues, while citizens' groups typically have more trouble obtaining financial resources-though recent advances in computer-aided direct mail and Internet-based fundraising have improved the financing capabilities of many citizens' groups.