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Economic theory and the welfare state : a survey and interpretation

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  • Nicholas Barr
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    Abstract

    'I propose here the view that, when the market fails to achieve an optimal state, society will, to some extent at least, recognize the gap, and nonmarket social institutions will arise attempting to bridge it....' (Kenneth Arrow 1963, p. 947). 'Economic theorists traditionally banish discussions of information to footnotes. Serious consideration of costs of communication, imperfect knowledge ... would, it is believed, complicate without informing.... [T]his comforting myth is false. Some of the most important conclusions of economic theory are not robust to considerations of imperfect information' (Michael Rothschild and Joseph Stiglitz 1976, p. 629). 'That any sane nation, having observed that you could provide for the supply of bread by giving bakers a pecuniary interest in baking for you, should go on to give a surgeon a pecuniary interest in cutting off your leg, is enough to make one despair of political humanity' (George Bernard Shaw, The Doctor's Dilemma, 1911).

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    File URL: http://eprints.lse.ac.uk/279/
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    Bibliographic Info

    Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 279.

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    Date of creation: Jun 1992
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    Publication status: Published in Journal of Economic Literature, June, 1992, 30(2), pp. 741-803. ISSN: 0022-0515
    Handle: RePEc:ehl:lserod:279

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    1. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931, Octomber.
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    Cited by:
    1. Vittas, Dimitri & Michelitsch, Roland, 1995. "Pension funds in Central Europe and Russia : their prospects and potential role in corporate governance," Policy Research Working Paper Series 1459, The World Bank.
    2. Waltraud Schelkle, 2012. "Collapsing worlds and varieties of welfare capitalism: in search of a new political economy of welfare," LSE Research Online Documents on Economics 53194, London School of Economics and Political Science, LSE Library.
    3. Erling Barth & Karl O. Moene, 2009. "The Equality Multiplier," NBER Working Papers 15076, National Bureau of Economic Research, Inc.
    4. Rothgang, Heinz & Cacace, Mirella, 2005. "Fair financing in Germany's public health insurance: income-related contributions or flat premiums," TranState Working Papers 26, University of Bremen, Collaborative Research Center 597: Transformations of the State.
    5. Fic, Tatiana & Ghate, Chetan, 2005. "The welfare state, thresholds, and economic growth," Economic Modelling, Elsevier, vol. 22(3), pages 571-598, May.
    6. Eloranta, Jari, 2004. "WARFARE AND WELFARE? Understanding 19th and 20th Century Central Government Spending," The Warwick Economics Research Paper Series (TWERPS) 699, University of Warwick, Department of Economics.
    7. Selén, Jan & Ståhlberg, Ann-Charlotte, 2000. "Survivor's Pension Rights and Wages," Working Paper Series 5/2000, Swedish Institute for Social Research.
    8. Olivia S. Mitchell, . "Administrative Costs in Public and Private Retirement Systems," Pension Research Council Working Papers 96-4, Wharton School Pension Research Council, University of Pennsylvania.
    9. Schmähl, Winfried, 1997. "Alterssicherung zwischen Vorsorge und Versorgung: Konzeptionen, Entwicklungstendenzen und eine Entwicklungsstrategie für die deutsche Alterssicherung," Working papers of the ZeS 05/1997, University of Bremen, Centre for Social Policy Research (ZeS).
    10. Nicholas Barr, 1993. "Income transfers in Russia : problems and some policy directions," LSE Research Online Documents on Economics 289, London School of Economics and Political Science, LSE Library.
    11. F.L. MacKellar & T.Y. Ermolieva, 1999. "The IIASA Social Security Reform Project Multiregional Economic-Demographic Growth Model: Policy Background and Algebraic Structure," Working Papers ir99007, International Institute for Applied Systems Analysis.
    12. Gál, Róbert Iván, 1996. "A társadalombiztosítási programok ösztönző hatásai
      [Incentive effects of social security programs: a survey]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 128-140.
    13. Dariusz Stanko, 2004. "Social Security in Theory and Practice: An Essay," Public Economics 0401007, EconWPA.
    14. Augusztinovics, Mária, 1999. "Nyugdíjrendszerek és reformok az átmeneti gazdaságokban
      [Pension system and reforms in the transition economies]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 657-672.
    15. Keith Griffin, 2000. "Problems of Poverty and Marginalization," Working Papers wp51, Political Economy Research Institute, University of Massachusetts at Amherst.
    16. Riboud, Michelle & Hoaquan Chu, 1997. "Pension reform, growth, and the labor market in Ukraine," Policy Research Working Paper Series 1731, The World Bank.
    17. Härpfer, Marco & Cacace, Mirella & Rothgang, Heinz, 2009. "And fairness for all? Wie gerecht ist die Finanzierung im deutschen Gesundheitssystem? Eine Berechnung des Kakwani-Index auf Basis der EVS," Working papers of the ZeS 04/2009, University of Bremen, Centre for Social Policy Research (ZeS).
    18. Valérie Paris & Pierre-Jean Lancry, 1997. "Âge, temps et normes : une analyse de la prescription pharmaceutique," Économie et Prévision, Programme National Persée, vol. 129(3), pages 173-187.
    19. Waltraud Schelkle, 2012. "Collapsing Worlds and Varieties of welfare capitalism: In search of a new political economy of welfare," LEQS – LSE 'Europe in Question' Discussion Paper Series 54, European Institute, LSE.

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