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What Should Policy Makers Know When Economists Say 'Market' Failure?

Georgetown Public Policy Review, Vol. 14, No. 1, pp. 27-32, 2009

7 Pages Posted: 15 Dec 2010  

Justin M. Ross

Indiana University - School of Public & Environmental Affairs

Date Written: March 1, 2009

Abstract

Two of the most recognized and discussed “market” failures in public policy exist when spillover effects on third parties exist to market transactions, and when individuals can enjoy the benefit of a good or service without paying for its provision. In this essay I illustrate these forms of market failures are actually institutional failures to adequately assign property rights. Recognizing this and framing them as a problem of property rights has helped economists and policy makers discover various innovative solutions that were previously overlooked. Policy makers who similarly frame these difficult problems as such, may themselves contribute to the ever expanding domain of new solutions.

Keywords: Market Failure, Property Rights

JEL Classification: A29, H41, H23

Suggested Citation

Ross, Justin M., What Should Policy Makers Know When Economists Say 'Market' Failure? (March 1, 2009). Georgetown Public Policy Review, Vol. 14, No. 1, pp. 27-32, 2009. Available at SSRN: https://ssrn.com/abstract=1724638

Justin M. Ross (Contact Author)

Indiana University - School of Public & Environmental Affairs ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

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