The Lighthouse Story

"The lighthouse on the cover is a useful icon for two reasons. First, it is a classic example of a public good: all passing ships benefit from its light, which is available to each of them undiminished regardless of their number. Second, the history of lighthouses illustrates an important message of this volume—that public goods need not be directly provided by governments. Over the centuries lighthouses have been built and operated by private investors, shipping guilds and public-private partnerships, in addition to government agencies. For more on the early history of lighthouses, we recommend Ronald Coase's article, "The Lighthouse in Economics", The Journal of Law and Economics 17 (October): 357–76."