Public
Goods and Their Importance to the Society: Sri Lanka
A public good is any good which is non-excludable and
non-rivalrous. This means that it is not possible to exclude anyone from using
this good and also the consumption of the good by one person does not reduce
the consumption of the good by someone else. Examples of public goods include
the police force, fire-protection, free to air television and radio programmes.
Public goods tend to have positive impacts and benefits for the people of the
country and thus these goods have positive externalities.
Governments have to provide public goods because they provide
great benefits to the consumers and they promote economic equity. However,
these public goods are not produced free of cost. Public goods are produced at
particular costs which are paid from the tax revenues of the government. Public
goods are funded from the taxes paid by the people of the country. However, many people tend to not pay their
taxes but they are still able to use these goods. Thus, public goods suffer
from the free-rider problem. The free-rider problem arises due to the fact that
these goods are non-excludable. This means that people who do not pay their
taxes are still able to fully utilise these goods without bearing the cost of
the good.
The Sri Lankan government provides the people of the country
with public services such as education, drinking water, national security and safety,
social welfare, health services, free to air television channels and various other
public goods. These public goods are funded from the taxes collected from the
citizens of the country. However, as many citizens do not pay their taxes, the
free-rider problem occurs on a large scale and the government has to
redistribute its revenue due to decrease in funds. Public goods such as free to
air television channels are not as important as goods like national security,
education or drinking water and thus they do not get enough funding from the
government and are forced to find alternative methods to fund themselves.
The Sri Lanka Rupavahini Corporation is the National
Television for Sri Lanka. This State Television stands for the benefit of all
Sri Lankans. The Rupavahini Corporation recognises the people’s diversity of
expectations, values, interests and needs and provides the people television
programmes in Sinhala, Tamil and English languages.
The Sri Lanka Rupavahini Corporation’s broadcasting and
programming is funded through government grants. However, due to insufficient
government grants, the channel now raises funds for itself through television
advertising. Television advertisements take place in the form of short
intervals between the programmes that are being broadcasted. As the government
channel is largely viewed due to their free cost, advertisements tend to be
costly as they are being viewed by a large number of people. Also these
advertisements tend to provide benefits to consumers as they provide
information about various products which tend to be useful to the consumers.
However, advertisements between programmes can also have negative effects.
Large number of advertisements leads to a decrease in quality of the
broadcasting material and this in turn reduces the productivity of the channel
and leads to unhappy viewing customers and this may also lead to a decrease in
the number of viewers of the channel.
Another method of raising funds for broadcasting is through
teleshopping. Various goods are advertised on television in the late hours of
the night and these advertisements have a contact number through which the good
can be purchased. Teleshopping occurs for at least two to three hours at a
stretch in the nights and television channels tend to earn large sums of money through
the provision of teleshopping. However, teleshopping leads to a large decrease
in the number of viewers of the channel as it takes the place of otherwise
entertaining broadcasts.
The Sri Lankan Broadcast Corporation (SLBC) is the national
radio service of the nation. It has, throughout its history, been committed to
its mandated task of maintaining the public service broadcasting in Sri Lanka,
by way of providing the public with the information and entertainment, and
fostering the social, cultural and economic development of the country. However,
the SLBC has also had to introduce a certain amount of commercial programming
into its operations, in order to partially finance its predominantly public
service broadcasting operations due to the free-rider problem and a
reallocation of resources.
I believe that, due to a decrease in government grants being
provided to the national television and radio channels of Sri Lanka, the introduction
of advertisements and commercial programming is necessary so that these two
organisations can continue to successfully fund themselves and provide products
free of any additional tax apart from taxes to the consumers. The advantages of
advertising and teleshopping for the broadcasting networks outweigh the
disadvantages and thus they have introduced and stuck with advertisements and
commercial programming or their networks.
References:
Cambridge Economics for the IB Diploma Second Edition- Ellie
Tragakes
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