PUBLIC ECONOMY AND INTERNALIZATON OF EXTERNALITIES

The public economy is the economy that deals with the issue of effectively eliminating the public needs of people in order to increase social welfare. At the same time, the public economy also includes the issue of directing the market in the direction of efficiency and prosperity by giving incentives to individuals or firms to meet special needs as well as public needs. Externalities are the positive or negative effects of other persons and organizations on the production or consumption of real or legal persons during the fulfillment of public and private needs. In other words, externalities are the costs or benefits of market transactions that are not reflected in prices. The internalization of externalities is the continuation of the benefits that arise as a result of production or consumption activities, and the elimination of negativity. The literature often mentions negative externalities and suggests policy recommendations for their elimination. There is state intervention due to the magnitude of the foreignness and the positive-negative consequence that it causes and the effectiveness in resource allocation. In this respect, the internalization of externalities in the study is approached within the framework of the market and especially public interventions