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The Public Critique of Welfare Economics: An Exploration

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  • Timothy Besley
  • Stephen Coate

Abstract

The welfare economic method for analyzing the case for government intervention is often criticized for ignoring the political determination of policies. While many economists accept the thrust of this critique, exactly when and how political determination interferes with a welfare economic analysis is not well understood. This paper explores the logic of the critique in a specific context, demonstrating how political determination of policy affects the case for government intervention. We show that one form of intervention is likely to have an impact on others through the political process. These spillover effects may even provide a justification for interventions that the welfare economic approach would reject.

Suggested Citation

  • Timothy Besley & Stephen Coate, 1999. "The Public Critique of Welfare Economics: An Exploration," NBER Working Papers 7083, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7083
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    References listed on IDEAS

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    1. Timothy Besley & Stephen Coate, 1997. "An Economic Model of Representative Democracy," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 85-114.
    2. Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
    3. Fernández, Raquel & Rogerson, Richard, 1999. "Education finance reform and investment in human capital: lessons from California," Journal of Public Economics, Elsevier, vol. 74(3), pages 327-350, December.
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    7. Martin J. Osborne & Al Slivinski, 1996. "A Model of Political Competition with Citizen-Candidates," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 65-96.
    8. repec:cep:stitep:/1997/334 is not listed on IDEAS
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    11. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-156, March.
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    More about this item

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • D60 - Microeconomics - - Welfare Economics - - - General

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