Externalities from government and non-profit sectors. Externalities have been emphasized mainly in connection with the private sector. This paper stresses, first, that if customary definitions of externalities are employed, theory predicts that government and non-profit sectors will 'produce' such spillovers, because appropriability is attenuated (which makes private costs and benefits to officials differ from social costs and benefits); and, second, that examples suggest that these market failures, i.e. failures of markets to exist, are surely as prevalent in the non-market sector as in the market sector. As usual, the results are 'potentially relevant externalities,' which may or may not be inefficiencies, depending on transaction and intervention costs.