The reason the government provides public goods is to resolve the issue of what economists call ''externalities.'' An externality is a cost or benefit that results from the nature of a service or product incurred or received by the public and third parties.

For example, interstate highways provide all members of the public the benefit of easy and fast travel and transportation across states and across the country. Therefore, it only makes sense that the public pay, through taxes, for the building and ongoing maintenance of highways.