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What is the Domain of the Welfare State?


  • Snower, Dennis J.


The paper examines the appropriate domain of the Welfare State by exploring the areas in which free enterprise fails to provide adequate welfare state services. The paper outlines a simple coherent strategy for formulating government welfare state policy by identifying the relevant market failures, government failures, and implementation costs. Two proposals for reform of the Welfare State are outlined.

Suggested Citation

  • Snower, Dennis J., 1994. "What is the Domain of the Welfare State?," CEPR Discussion Papers 1018, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1018

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    References listed on IDEAS

    1. Dwight M. Jaffee & Thomas Russell, 1976. "Imperfect Information, Uncertainty, and Credit Rationing," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 651-666.
    2. Diamond, Douglas W, 1991. "Monitoring and Reputation: The Choice between Bank Loans and Directly Placed Debt," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 689-721, August.
    3. Elston, Julie Ann, 1996. "Investment, Liquidity Constraints and Bank Relationships: Evidence from German Manufacturing Firms," CEPR Discussion Papers 1329, C.E.P.R. Discussion Papers.
    4. Robert S. Chirinko, 1992. "Business Fixed Investment Spending: A Critical survey of Modeling Strategies, Empirical Results, and Policy Implications," Working Papers 9213, Harris School of Public Policy Studies, University of Chicago.
    5. William C. Brainard & James Tobin, 1968. "Pitfalls in Financial Model-Building," Cowles Foundation Discussion Papers 244, Cowles Foundation for Research in Economics, Yale University.
    6. Steven M. Fazzari & R. Glenn Hubbard & Bruce C. Petersen, 1988. "Financing Constraints and Corporate Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(1), pages 141-206.
    7. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-827, August.
    8. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    9. Cable, John R, 1985. "Capital Market Information and Industrial Performance: The Role of West German Banks," Economic Journal, Royal Economic Society, vol. 95(377), pages 118-132, March.
    10. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    11. Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(1), pages 15-29, February.
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    Cited by:

    1. Epstein, Gil S & Hillman, Arye L., 2000. "Social Harmony At The Boundaries Of The Welfare State: Immigrants And Social Transfers," CEPR Discussion Papers 2414, C.E.P.R. Discussion Papers.

    More about this item


    Education; Free Enterprise; Health; Inequality; Poverty; Unemployment; Welfare State;

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods
    • I1 - Health, Education, and Welfare - - Health
    • I2 - Health, Education, and Welfare - - Education
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • P5 - Economic Systems - - Comparative Economic Systems


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