Editing Government failure (section)

== History ==
The phrase "government failure" emerged as a term of art in the early 1960s with the rise of intellectual and political criticism of government regulations. Building on the premise that the only legitimate rationale for government regulation was [[market failure]], some economists in [[public choice]] developed new theories of how governments can make costly, failure-prone, or ill-advised interventions into markets, creating worse outcomes than the market failure itself.<ref>Id.</ref>

An early use of "government failure" was by [[Ronald Coase]] (1964) in comparing an actual and ideal system of [[regulatory economics|industrial regulation]]:<ref>Coase, Ronald (1964). "The Regulated Industries: Discussion," ''American Economic Review'', 54(2), p. 195, as quoted in [[Oliver E. Williamson]] (2002), "The Lens of Contract: Private Ordering," ''American Economic Review'', 92(2), pp. [https://www.jstor.org/discover/10.2307/3083447?uid=3739936&uid=2&uid=4&uid=3739256&sid=21101746153107 438]–443.</ref>
:Contemplation of an optimal system may provide techniques of analysis that would otherwise have been missed and, in certain special cases, it may go far to providing a solution. But in general its influence has been pernicious. It has directed economists’ attention away from the main question, which is how alternative arrangements will actually work in practice. It has led economists to derive conclusions for economic policy from a study of an abstract of a market situation. It is no accident that in the literature...we find a category "market failure" but no category "government failure." Until we realize that we are choosing between social arrangements which are all more or less failures, we are not likely to make much headway.

[[Roland McKean]] used the term in 1965 to suggest limitations on an [[invisible hand|invisible-hand]] notion of government behavior.<ref>McKean, Roland N. (1965), "The Unseen Hand in Government," "American Economic Review," 55(3), pp, [https://www.jstor.org/pss/1814561 496]–506.</ref> More formal and general analysis followed<ref>• Charles J. Wolf, (1979). "A Theory of Non-Market Failure," ''Journal of Law and Economics'',  22 (1), pp. [https://www.jstor.org/pss/725215 107]–139.<br>&nbsp;&nbsp;• _____ (2003). ''Markets Or Governments: Choosing between Imperfect Alternatives'', MIT Press.  [http://mitpress.mit.edu/books/markets-or-governments Description] and chapter-preview  [https://books.google.com/books?id=nRPYOUTcB-4C&dq=false&pg=PR7 links.]<br>&nbsp;&nbsp;• Mrinal Datta-Chaudhuri (1990). "Market Failure and Government Failure." ''Journal of Economic Perspectives'', 4(3), pp. [http://netdrive.montclair.edu/~lebelp/DattaChaudMktFailJEP1990.pdf 25–39]{{dead link|date=January 2018|bot=medic}}{{cbignore|bot=medic}}.<br>&nbsp;&nbsp;• Aidan R. Vining and David L. Weimer (1990). "Government Supply and Government Production Failure: A Framework Based on Contestability," ''Journal of Public Policy Journal of Public Policy'', 10(1), pp. 1–22. [http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=2749452 Abstract.]<br>&nbsp;&nbsp;• [[Joseph E. Stiglitz]] (1998). "The Private Uses of Public Interests: Incentives and Institutions," ''Journal of Economic Perspectives'', 12(2), pp. [http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.12.2.3 3–22.]<br>&nbsp;&nbsp;• Richard O. Zerbe Jr. and Howard E. McCurdy (1999). "The Failure of Market Failure," ''Journal of Policy Analysis and Management'', 18(4), pp.&nbsp;558–578. [https://archive.today/20130105235221/http://www3.interscience.wiley.com/journal/64500394/abstract?CRETRY=1&SRETRY=0 Abstract.] Reprinted in ''Economic Efficiency in Law and Economics,''  pp. [https://books.google.com/books?id=VNud52F-wp0C&pg=PA164=GBS_ATB 164–187.]<br>&nbsp;&nbsp;• [[Clifford Winston]] (2006). ''Government Failure versus Market Failure: Microeconomics Policy Research and Government Performance''. Brookings Institution Press. [http://www.brookings.edu/views/papers/winston/20061003.pdf Link.] {{webarchive|url=https://web.archive.org/web/20110429120423/http://www.brookings.edu/views/papers/winston/20061003.pdf |date=2011-04-29 }}
</ref> in such areas as [[development economics]],<ref>• [[Anne O. Krueger]]  (1990). "Government Failures in Development,"  ''Journal of Economic Perspectives'', 4(3), pp. [http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.4.3.9 9–23.]<br>&nbsp;&nbsp;• Eduardo Wiesner (1998). "Transaction Cost Economics and Public Sector Rent-Seeking in Developing Countries: Toward a Theory of Government Failure," in E. Wiesner and R. Picciotto, ed. ''Evaluation and Development: The Institutional Dimension'', pp. [https://books.google.com/books?id=qofE1U9_ubQC&pg=PA108=GBS_ATB 108–123.] World Bank.</ref> [[ecological economics]],<ref>Thomas Andersson  (1991).  "Government Failure – the Cause of Global Environmental Mismanagement," ''Ecological Economics'',  4(3), pp.&nbsp;215–236. [https://archive.today/20130201211941/http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VDY-45GNW4C-3&_user=10&_coverDate=12/31/1991&_rdoc=1&_fmt=high&_orig=search&_sort=d&_docanchor=&view=c&_searchStrId=1409726156&_rerunOrigin=scholar.google&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=175ee87419cec84eba76a2d55e37000e Abstract.]
</ref> [[political science]],<ref name=":3">• [[Julian Le Grand]] (1991). "The Theory of Government Failure," ''British Journal of Political Science'', 21(4), pp. [http://iibf.ogu.edu.tr/erdal/Dosyalar/Kamu%20Ekonomisi%20YL/Gov.Failure/Grand%20Julianle%20The%20Theory%20of%20Government%20Failure.pdf 423–442.]{{dead link|date=October 2017 |bot=InternetArchiveBot |fix-attempted=yes }}<br>&nbsp;&nbsp;• Eduardo Wiesner (1998). "Transaction Cost Economics and Public Sector Rent-Seeking in Developing Countries: Toward a Theory of Government Failure," in E. Wiesner and R. Picciotto, ed. ''Evaluation and Development: The Institutional Dimension'', pp. [https://books.google.com/books?id=qofE1U9_ubQC&pg=PA108=GBS_ATB 108–123.] World Bank.
</ref> [[political economy]],<ref>• [[Oliver E. Williamson]] (1995). "The Politics and Economics of Redistribution and Inefficiency," ''Greek Economic Review'', December, 17, pp. 115–136, reprinted in Williamson (1996), ''The Mechanisms of Governance'', Oxford University Press, ch. 8, pp.  [https://books.google.com/books?id=meERBVysP6YC&pg=PA195 195–] 218.<br />&nbsp;&nbsp; • [[Federico Sturzenegger|Sturzenegger, Federico]], and Mariano Tommasi (1998). ''The Polítical Economy of Reform'', MIT Press.  [http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=7698 Description] {{webarchive|url=https://web.archive.org/web/20121011071925/http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=7698 |date=2012-10-11 }} and links to [https://books.google.com/books/mitpress?id=oxhsaTkxzRUC&printsec=find&pg=PR5=gbs_atb#v=onepage&q=&f=false chapter-previews] and   [https://books.google.com/books/mitpress?id=oxhsaTkxzRUC&printsec=find&pg=gbs_atb#v=onepage&q=failure&f=false "failure".]<br />&nbsp;&nbsp; • Sharun W. Mukand (2008). "policy reform, political economy of," ''The New Palgrave Dictionary of Economics'', 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_P000363&edition= Abstract.]<br />&nbsp;&nbsp; • [[James M. Buchanan|Buchanan James M.]] (2008). "public debt," ''The New Palgrave Dictionary of Economics'' , 2nd Edition ''The New Palgrave Dictionary of Economics'' (2008), 2nd Edition.[http://www.dictionaryofeconomics.com/article?id=pde2008_P000241&q=%22government%20failure%22&topicid=&result_number=6 Abstract.]</ref> [[public choice]] theory,<ref>• Buchanan James M. (1983). "The Achievement and the Limits of Public Choice in Diagnosing Government Failure and in Offering Bases for Constructive Reform," in ''Anatomy of Government Deficiencies'', ed. Horst Hanusch (Berlin: Springer-Verlag, 1983), pp.&nbsp;15–25.<br>&nbsp;&nbsp;• [[Gordon Tullock]] ''et al.'' (2002), ''Government Failure: A Primer in Public Choice'', Cato Institute. [https://books.google.com/books?id=6xqcrKBjELIC&pg=PA198=GBS_ATB Description] and scroll-down for [https://books.google.com/books?id=6xqcrKBjELIC preview.]</ref> and [[transaction-cost economics]].<ref>Richard O. Zerbe Jr. and Howard E. McCurdy (1999). "The Failure of Market Failure," ''Journal of Policy Analysis and Management'', 18(4), pp.&nbsp;558–578. [https://archive.today/20130105235221/http://www3.interscience.wiley.com/journal/64500394/abstract?CRETRY=1&SRETRY=0 Abstract.] Reprinted in Zerbe (2001), ''Economic Efficiency in Law and Economics,''  pp. [https://books.google.com/books?id=VNud52F-wp0C&pg=PA164=GBS_ATB 164–187.]</ref> Later, due to the popularity of [[Public choice|public choice theory]] in 1970s, government failure attracted the attention of the academic community.