Beyond Public and Private: Collective Provision Under Conditions of Supermodularity

We recently published a new paper jointly authored by our cofounder Divya Siddarth, alongside Matthew Prewitt and Glen Weyl, that provides a framework for thinking beyond the traditional economic approach of public vs private goods. The paper argues for funding mechanisms that take into account “supermodular” goods, which encompass everything under the familiar umbrella of “public goods”, but also include private or excludable systems that become more effective when provided to more people.

Capitalism assumes a world of discrete agents with private property endowments that they can trade with each other – in other words, it thrives in a submodular world. This explains a variety of failures in the physical and digital spheres, from the proliferation of technological monopolies built on supermodular network effects to the breakdown of our shared information ecosystem. On the other hand, the potential collective benefit of appropriately resourcing, incentivizing, and governing supermodularity is enormous. This requires a creative approach to existing delineations between public, private, and commons-based provision.

Two key concepts underwriting these existing divisions - rivalry and excludability - exist on a spectrum, and many goods have both submodular and supermodular components. In supermodular contexts, the basic principles of market capitalism often break down, as paying people according to their marginal contribution becomes impossible. This calls for more nuanced, hybrid approaches to funding and governing these goods.

In this paper, we propose developing “collective intelligence” mechanisms (hybrid prioritization and decision-making mechanisms) that combine democratic, market, and community-based elements to steward supermodular systems. Ideas include mixed public-private funding models, last-mile funding for positive-sum infrastructure, public investment with decentralized input and shared returns, and deliberative value elicitation.

By expanding the scope of these mechanisms across both public and private realms, we can unlock the enormous potential benefit of properly resourcing and governing supermodular goods and networks.

Read the paper at cip.org/supermodular.