Saving Government Failure Theory from Itself: Recasting Political Economy from an Austrian Perspective
18 Pages Posted: 18 May 2006 Last revised: 25 Oct 2010
Date Written: July 28, 2010
The economic approach to politics revolutionized the way scholars in economics and political science approached the study of political decision-making by introducing the possibility of government failure. However, the persistent and consistent application of neoclassical models of economics also seemed to suggest that once the full costs were accounted for, this failure was an illusion. This paper counters these arguments associated with George Stigler, Gary Becker and more recently Donald Wittman, at the core of the economic theory that underlies their approach. In contrast, we develop an alternative model of political economy grounded in the Austrian conception of the dynamic market process.
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