Economic theory as it applies to public sector information

Abstract

Introduction This chapter1 reviews the economics literature pertaining to public sector information. In addition, the economic arguments put forward in government studies and policy documents are reviewed, focusing on the current push for harmonization of public sector information policy across the European Union and the debate as to which model of information dissemination is preferable (i.e., the U.S. open access model versus the more restrictive European model). Some works by economists that appeared in the library and information science (LIS) and other literatures are covered, but the LIS literature in general is not reviewed. The term “public sector information” (PSI) is used here rather than “government information” or “official information.” The terms are synonymous, although PSI can be construed more broadly, to include any information produced by public sector bodies, including cultural and educational institutions. Public sector information (and content) is any kind of information that is produced and/or collected by a public body as part of the institution’s mandated role. It is directly generated by, and associated with, the functioning of the public sector and is readily useable in commercial applications (Organisation for Economic Co-operation and Development, Directorate for Science, Technology and Industry, Working Party on the Economy, 2006). As will be discussed, the economic value of its commercial use is the focus of much recent attention in Europe. The chapter begins with a brief summary of neoclassical economic theory, including the concepts of market failure and public goods, to lay the groundwork for the review. Readers familiar with these concepts may wish to move directly to the section on the economics of information. The literature on the history of information economics; the definitions of information used by economists; and their concepts of information as a public good, as a commodity, and as a contributor to social value are addressed. The review then focuses on the economic arguments and rationalization for public sector versus private sector supply of information, the impact of PSI on general economic efficiency, commercial re-use, value adding, and revenue generation. Then the literature on the pricing of information and the arguments around the imposition of user fees for PSI, and, finally, the arguments for CHAPTER 10