The Coasean analysis of lighthouse financing: myths and realities

Elodie Bertrand (1)

1 ISJPS - Institut des sciences juridique et philosophique de la Sorbonne - UMR 8103

In ‘The Lighthouse in Economics’ (Coase, 1974), Coase reached the conclusion that in England there existed a relatively efficient privately financed lighthouse system, which would refute economists’ traditional statements concerning the production of public goods. The purpose of this paper is to challenge his conclusion. We first show that, from a methodological and theoretical perspective, ‘The Lighthouse’ is consistent with ‘The Problem of Social Cost’ (Coase, 1960). Then, applying Coase’s own method (historical case studies), we attempt to re-examine the respective roles and efficiencies of private initiative and government.

Mots clés: Coase; Lighthouses; Public utilities; Externalities

Domaines: Economies et finances; Droit; Histoire, Philosophie et Sociologie des sciences

Elodie Bertrand. The Coasean analysis of lighthouse financing: myths and realities. Cambridge Journal of Economics, 2006, 30 (3), pp.389-402. ⟨10.1093/cje/bei068⟩. ⟨hal-03507599⟩