Failures of the State: Theory and Policy

32 Pages Posted: 24 Feb 2013

See all articles by Alexander Radygin

Alexander Radygin

Gaidar Institute for Economic Policy; Russian Presidential Academy of National Economy and Public Administration (RANEPA) - Institute of Applied Economic Research

Revold Entov

Gaidar Institute for Economic Policy

Date Written: Decvember 17, 2012

Abstract

The article deals with the evolution of approaches in modern economic theory to the problem of “failures of the state”. This approach, which has developed in opposition to concepts of “market failure”, can be seen as a search for a new strategy of political and economic analysis of mechanisms of resource allocation and of historical social institutions and their effect on the efficiency of economic processes. Special attention is paid to the problem of information retrieval as a starting point for the analysis of the economic functions of the public sector, to ways of funding state undertakings, to the impact of rent-seeking behavior, to the role of the political process, and to negative externalities such as lack of coordination and the presence of the state in the economy in general. An interdisciplinary approach to “failures of the state” takes into account the influence of legal norms and institutions on the nature of allocation of public resources, as illustrated by the examples from the modern Russian economy.

Keywords: failures of the state, public policy, public choice, allocational efficiency, information, privatization

JEL Classification: B20, D02, D60, K40, L30, P20

Suggested Citation

Radygin, Alexander and Entov, Revold, Failures of the State: Theory and Policy (Decvember 17, 2012). Available at SSRN: https://ssrn.com/abstract=2223645 or http://dx.doi.org/10.2139/ssrn.2223645

Alexander Radygin (Contact Author)

Gaidar Institute for Economic Policy ( email )

Gazetny pereulok, 3-5
Moscow, 125993
Russia

Russian Presidential Academy of National Economy and Public Administration (RANEPA) - Institute of Applied Economic Research ( email )

Russia

Revold Entov

Gaidar Institute for Economic Policy ( email )

Gazetny pereulok, 3-5
Moscow, 125993
Russia

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