Cascading Expert Failure

Abstract

A problem that has plagued market failure discussions is: "why does bad policy exist and persist?" Various schools of thought have answered that question, but I argue that the explanations, while correct, are incomplete. In this paper, I apply the expert failure literature to the problem of economic policy discussions to show that 1) failed advice can lead to other experts to give poor advice and 2) that a consequence of expert failure is that failed policy can persist even if the expert acknowledges the advice has failed. I demonstrate these conclusions with a case study on COVID-19 testing in the United States.

Keywords: Market Failure, Expert Failure, Externality, Asymmetrical Information, Public Policy, Experts, COVID-19

JEL Classification: D62, D82, K20