Standard economic theory suggests that government is a cheaper way to internalize prevention externalities than private entities. This paper argues that this view depends on unexamined assumptions about transaction costs and the costs of improving state capacity. Public and private entities might be cheaper ways to internalize prevention externalities depending on differences in transaction costs, state capacity, and the willingness to improve public health. The 1878 yellow fever epidemic throughout the lower Mississippi Valley—one of the worst epidemiological disasters in the United States during the nineteenth century—provides ample context to examine this argument. Primary responses include municipal quarantine, flight from towns and cities, and the formation of refugee camps. Whereas municipal governments cheaply provided some quarantine services, individuals and private actors cheaply fled from infected areas and governed refugee camps. Responses in Memphis, one of the worst affected areas, further demonstrate that differences in these costs influence prevention externalities and how public and private entities respond to complex disease problems.

标准经济理论表明，与私人实体相比，政府是将预防外部性内部化的更便宜的方式。本文认为，这种观点取决于对交易成本和提高国家能力的成本的未经检验的假设。公共和私人实体可能是内部化预防外部性的更便宜的方式，具体取决于交易成本、国家能力和改善公共卫生的意愿的差异。1878 年密西西比河下游地区爆发的黄热病疫情是 19 世纪美国最严重的流行病灾难之一，为检验这一论点提供了充足的背景。主要应对措施包括市政隔离、逃离城镇以及建立难民营。尽管市政府廉价地提供了一些检疫服务，但个人和私人行为者却廉价地逃离受感染地区和受管理的难民营。孟菲斯是受影响最严重的地区之一，其应对措施进一步表明，这些成本的差异会影响预防的外部性以及公共和私人实体如何应对复杂的疾病问题。