Grand, Julian Le
The theory of government failure
This article outlines a theory of government failure that parallels the more well-established theory of market failure. It builds on the work of the public choice school concerning the behaviour of governments under the assumption that all relevant agents pursue their self-interest. It examines the theoretical consequences for efficiency and equity of three kinds of government activity: provision, subsidy and regulation. The conclusion is reached that all three may creat inefficiency and inequity, but that the form and magniture of the failure will differ with the type of activity, hence it is import that the three are distinguishes. It is also emphasised that the extent of government failure in each case
Government
Failure
Theory
Government
The theory of government failure
This article outlines a theory of government failure that parallels the more well-established theory of market failure. It builds on the work of the public choice school concerning the behaviour of governments under the assumption that all relevant agents pursue their self-interest. It examines the theoretical consequences for efficiency and equity of three kinds of government activity: provision, subsidy and regulation. The conclusion is reached that all three may creat inefficiency and inequity, but that the form and magniture of the failure will differ with the type of activity, hence it is import that the three are distinguishes. It is also emphasised that the extent of government failure in each case
Government
Failure
Theory
Government