This entry introduces the reader to the concept of externalities as well as some recent advances concerning how we can conceptualize and taxonomize externalities considering recent human challenges. The main motivation is threefold: first, to guide readers into the nature and conceptualization of externalities from a political economy perspective; second, to indicate the relevance of establishing property rights and diminishing transactions costs, which leads toward the market-versus-state debate over the governance of externalities; and third, and finally, the entry shows some recent advances concerning how we can taxonomize externalities—beyond the market-versus-state dichotomy—while considering also recent human challenges such as pandemics, climate change, and the depletion of global fisheries, to name a few of the most pressing problems related to externalities.