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Thursday, September 29, 2005

New Colorado Springs park

Gazette.com: "The $11 million park will be formally dedicated Friday evening in an event anticipated since 1992 when civic leaders first envisioned the park as an anchor for urban renewal. "
"Voters bought into that vision in 1998 when they approved a bond issue that included funding for the park. "

The Colorado Springs government used the sales of bonds to raise $11 million dollars to subsidize a park. It is apparant that the park is in demand, as voters approved this action. The question is, what is the normative decision government should make in subsidizing parks. In terms of effieciency you must evaluate the demand and if there is a market failure of demand. Does a park provide a positive externality? For a park to be a positive externality it must be a public good. If it is not a public good it can be excluded and kept in the market. As a public good it can have a person who is not a part of the market, interdependent and uses it unintentionally. A park can be seen as a public good, but only as the government chooses not to exclude it, because it can be physically excluded. I believe that a park though nice and desirable , is not a public good nor a positive externality. A park is a club good; a part of market transaction. Therfore there is no market failure and by efficiency standards this means that government should not get involved, but rather those who demand it should pay for it.

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