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Government Failure

Society, Markets and Rules Wilfred Dolfsma, Professor of Innovation and Entrepreneurship, Loughborough University London, UK
This highly unique book takes a fundamental look at when and how a government can fail at its core responsibility of formulating rules. Government, representing society, relates to the economy by formulating the rules within which (market) players should operate. Although market and business failure are much discussed in the economics literature, government failure is often overlooked. This book addresses this gap, exploring in detail what constitutes government failure.
Extent: 168 pp
Hardback Price: $111.00 Web: $99.90
Publication Date: 2013
ISBN: 978 1 78254 606 1
Availability: In Stock
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  • Economics and Finance
  • Institutional Economics
  • Law and Economics
  • Political Economy
  • Public Choice Theory
  • Welfare Economics
  • Law - Academic
  • Law and Economics
  • Politics and Public Policy
  • Political Economy
  • Public Choice
  • Social Policy and Sociology
  • Economics of Social Policy
This highly unique book takes a fundamental look at when and how a government can fail at its core responsibility of formulating rules. Government, representing society, relates to the economy by formulating the rules within which (market) players should operate. Although market and business failure are much discussed in the economics literature, government failure is often overlooked. This book addresses this gap, exploring in detail what constitutes government failure.

Wilfred Dolfsma illustrates that it is not adequate to discuss government failure simply with reference to its level of expenditure, as is usually the case. Defining government failure and analysing it in the domains of health care, innovation and technology, he explores topics such as how market and society relate, consequences of conflicts between government policies, how government should (not) intervene, the vulnerability of institutions and rules (set out by government), and suggests a welfare perspective for evaluative purposes.

This stimulating and thought provoking book will prove a fascinating read for academics, researchers and advanced students in economics – particularly public choice and institutional economics – public administration, policy studies, and law and economics.
‘Starting from the idea that market and state are intertwined domains, and explaining the economy as a system of communication evolving through innovation, this excellent book makes a valuable contribution to understanding government rule setting in knowledge-based economies. It provides a taxonomy of ways in which government rules function more or less successfully, and addresses the important problem of institutional vulnerability. Intellectual property rights laws and reform of health care systems are perceptively discussed. This book is strongly recommended for public policy experts and researchers investigating the public–private economy.’
– John Davis, Marquette University, US and University of Amsterdam, the Netherlands

‘Since the 1970s the conventional wisdom has been that governments should retreat from the economic sphere and enhance the role of markets. The financial crash of 2008 has brought that into question. This stimulating set of essays considers the role of government in modern complex economies. Addressing the potential for both government failure and market failure, and drawing on empirical evidence, these studies are important contributions to a revived debate.’
– Geoffrey M. Hodgson, University of Hertfordshire, UK

‘The idea that governments as well as markets can fail has been central to the public choice literature for the last half century. Typically government failure is described and measured as excessive expenditures or unbalanced budgets. This original book points out that government failures often take the form of inappropriate or inconsistent rules governing the private sector. The argument is nicely illustrated using real-world examples in the areas of healthcare, innovation, and intellectual property. The book is a timely and important contribution to the literature.’
– Dennis C. Mueller, University of Vienna, Austria
Contents: 1. Introducing Government Failure 2. How Market and Society Relate 3. The G-Factor: Weighing the Visible Hand of Government Intervention with Killian McCarthy and Tao Zhu 4. Government Policy: Private Incentives, Public Virtues? 5. Government Failure 6. Policy Conflicts: The Case of Healthcare 7. Government Failure, IPRs and Economic Development 8. A Confused Market: Divergent Routes to Implementing Market-Oriented Reform in Healthcare 9. Vulnerability of Institutions and Rules 10. Establishing Government Failure or Success: A Dynamic Welfare Perspective 11. Conclusions: Market, Business and Government References Index