Why might the government provide certain services rather than the private sector?

The government often provides certain services because doing so ensures that access to these essential services is available to all members of society, regardless of their ability to pay. Many vital services, such as education, healthcare, and public transportation, are crucial for the wellbeing of the community yet may not be profitable for private firms to offer.

In a free market, private companies typically prioritize profit, which can lead to under-provision of essential services in lower-income areas or to individuals who cannot afford to pay. By providing these services directly, the government can guarantee that everyone has access, thereby promoting equity and social welfare. This role of the government is particularly important in areas that have significant externalities or public goods, where the benefits of providing the service extend beyond those who directly pay for it.