Failures of the State: Theory and Policy
AbstractThe article deals with the evolution of approaches in modern economic theory to the problem of “failures of the state”. This approach, which has developed in opposition to concepts of “market failure”, can be seen as a search for a new strategy of political and economic analysis of mechanisms of resource allocation and of historical social institutions and their effect on the efficiency of economic processes. Special attention is paid to the problem of information retrieval as a starting point for the analysis of the economic functions of the public sector, to ways of funding state undertakings, to the impact of rent-seeking behavior, to the role of the political process, and to negative externalities such as lack of coordination and the presence of the state in the economy in general. An interdisciplinary approach to “failures of the state” takes into account the influence of legal norms and institutions on the nature of allocation of public resources, as illustrated by the examples from the modern Russian economy.
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Bibliographic InfoPaper provided by Gaidar Institute for Economic Policy in its series Working Papers with number 0053.
Length: 32 pages
Date of creation: 2012
Date of revision: 2013
failures of the state; public policy; public choice; allocational efficiency; information; privatization;
Find related papers by JEL classification:
- B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D60 - Microeconomics - - Welfare Economics - - - General
- K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
- L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
- P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
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