Editing Collective action (section)

===Institutional design===
While public goods are often provided by governments, this is not always the case.  Various institutional designs have been studied with the aim of reducing the collaborative failure.  The best design for a given situation depends on the production costs, the utility function, and the collaborative effects, amongst other things.  Here are only some examples:

====Joint products====
A joint-product model analyzes the collaborative effect of joining a private good to a public good.  For example, a tax deduction (private good) can be tied to a donation to a charity (public good).

It can be shown that the provision of the public good increases when tied to the private good, as long as the private good is provided by a monopoly (otherwise the private good would be provided by competitors without the link to the public good).

====Clubs====
Some institutional design, e.g., [[Intellectual property|intellectual property rights]], can introduce an exclusion mechanism and turn a pure [[Public good (economics)|public good]] into an impure public good artificially.

If the costs of the exclusion mechanism are not higher than the gain from the [[collaboration]], clubs can emerge.  [[James M. Buchanan]] showed in his seminal paper that clubs can be an efficient alternative to government interventions.<ref>{{cite journal|last=Buchanan|first=James M.|title=An Economic Theory of Clubs|journal=Economica|year=1965|volume=32|pages=1–14|jstor=2552442|doi=10.2307/2552442|issue=125}}</ref>

A [[nation]] can be seen as a club whose members are its citizens. Government would then be the manager of this club.

====Federated structure====
In some cases, theory shows that collaboration emerges spontaneously in smaller groups rather than in large ones (see e.g. [[Dunbar's number]]). This explains why [[trade union|labor unions]] or [[Charitable organization|charities]] often have a federated structure.