Market Theories and Regulation: Why Do Markets and Governments Fail?

Dimária Silva Meirelles

Mackenzie Presbiterian University


Cadernos Ebape, Vol. 8, No. 4, pp. 644-660

As a rule regulation, inspired by neoclassical economics, is a response to market failures, which are in disagreement with the ideal of a competitive market, especially in the sectors of public goods. It is interesting to note that regulation is also subject to failures, called government failures. After all, why do markets and governments fail? The answer to this question involves a deep conceptual discussion on markets and competition. The aim of this paper is to present the theoretical debate surrounding market approaches, especially in the heterodox field, which include the views of evolutionary economics, Austrian school and the modern economic sociology. The conclusion is that the neoclassical theory, compared to these approaches, has a restricted view of the competition process.

Keywords: competition, regulation, market theories

JEL Classification: L40, D40, D61, A14

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Date posted: September 15, 2012  

Suggested Citation

Meirelles, Dimária Silva, Market Theories and Regulation: Why Do Markets and Governments Fail? (2010). Cadernos Ebape, Vol. 8, No. 4, pp. 644-660. Available at SSRN: https://ssrn.com/abstract=2146609

Contact Information

Dimaria Silva Meirelles (Contact Author)
Mackenzie Presbiterian University ( email )
Rua da Consolação 896 Prédio 29
Alameda Serra da Mantiqueira, 259 Itapevi-SP
São Paulo, 010302907
5511 41924126 (Phone)
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