Is the passport system a public good that helps alleviate asymmetric informaiton?

Expert Answers
pohnpei397 eNotes educator| Certified Educator

Passports are not exactly public goods, but they could be said to reduce the problem of asymmetric information in a limited number of cases.

Passports are not public goods because they can be denied to some people.  They are not like clean air or other classic public goods that cannot be denied to anyone once they are provided.  For example, an American must pay a fee to get a passport.  This means it is not really a public good.

But passports can alleviate the problem of asymmetric information in some cases.  They do this in cases where only one party to a transaction truly knows the identity of the other party.  If I go to get a loan from a bank, the bank and I have asymmetric information.  I know who they are, but they do not know who I am.  The use of a passport guarantees my identity and makes a situation where the bank and I have symmetrical information about our respective identities.