SOURCES OF GOVERNMENTAL FAILURE AND IMPERFECT INFORMATION AS POLITICAL FAILURE

Abstract

Besides market failure, there is such a thing as governmental failure. Government enacted policies may produce inefficient and/or inequitable consequences. Public choice economists argue that the fact that the market is inefficient does not imply that government will do any better. There are several sources of governmental failure, which has been investigated in the literature. Rational voter ignorance, rational voter irrelevance, shortsightedness effect, rent seeking are some of the examples for governmental failure. This paper aims to summarize the sources of governmental failure in general and then focus on imperfect information specifically.

Keywords

• public choice,governmental failure

References

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