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An Evolutionary Efficiency Alternative to the Notion of Pareto Efficiency

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The paper argues that the notion of Pareto efficiency builds on two normative assumptions: the more general consequentialist norm of any efficiency criterion, and the strong no-harm principle of the prohibition of any redistribution during the economic process that hurts at least one person. These normative concerns lead to a constrained and static notion of efficiency in mainstream economics, ignoring dynamic efficiency gains from more equal allocations of resources. The paper argues that a weak no-harm principle instead provides an endogenous efficiency criterion, which shifts attention away from equilibrium analysis in hypothetically perfect markets towards an evolutionary analysis of efficiency in real-world, non-equilibrium markets. Moreover, such an evolutionary notion of efficiency would be less normative than the Paretian concept.

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  • Irene van Staveren, 2012. "An Evolutionary Efficiency Alternative to the Notion of Pareto Efficiency," Economic Thought, World Economics Association, vol. 1(1), pages 1-6, July.
    • Handle: RePEc:wea:econth:v:1:y:2012:i:1:p:6
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    Cited by:

    1. van Staveren, I.P., 2017. "Has populism reached economics?," ISS Working Papers - General Series 361, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    2. Chanteau, Jean-Pierre & Labrousse, Agnès, 2013. "L’institutionnalisme méthodologique d’Elinor Ostrom : quelques enjeux et controverses," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 14.
    3. van Staveren, I.P., 2017. "Has populism reached economics? Two criteria for assessing normative empirical concepts in economics," ISS Working Papers - General Series 631, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    4. Li, Cheng, 2014. "Rationality and Beyond: A Critique of the Nature and Task of Economics," MPRA Paper 56651, University Library of Munich, Germany.
    5. Félix-Fernando Muñoz & María-Isabel Encinar, 2019. "Some elements for a definition of an evolutionary efficiency criterion," Journal of Evolutionary Economics, Springer, vol. 29(3), pages 919-937, July.

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