Economists and the Analysis of Government Failure: Fallacies in the Chicago and Virginia Interpretations of Cambridge Welfare Economics

Cambridge Journal of Economics, Forthcoming

28 Pages Posted: 6 Dec 2006 Last revised: 30 Jan 2012

See all articles by Roger Backhouse

Roger Backhouse

University of Birmingham - Department of Economics; Erasmus University Rotterdam (EUR) - Erasmus Institute for Philosophy and Economics (EIPE)

Steven G. Medema

Duke University - Department of Economics

Date Written: November 12, 2011

Abstract

The theory of government failure was developed as a reaction against Pigovian welfare economics and the Cambridge approach to economic policy analysis generally, which ostensibly lacked a theory of governmental behavior. We argue that the Cambridge tradition — as reflected in the writings of Henry Sidgwick, Alfred Marshall, and A.C. Pigou — evidences a clear sense for the potential limitations and inefficiencies of the political process that were later developed, albeit in more systematic fashion, in the government failure literature and at the same time bring out the ways in which the Cambridge and contemporary government failure approaches diverge, in spite of their strong similarities.

Keywords: Public Choice, Chicago School, Cambridge School, Economic Role of Government

JEL Classification: B20, D70, H10

Suggested Citation

Backhouse, Roger and Medema, Steven G., Economists and the Analysis of Government Failure: Fallacies in the Chicago and Virginia Interpretations of Cambridge Welfare Economics (November 12, 2011). Cambridge Journal of Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=949203 or http://dx.doi.org/10.2139/ssrn.949203

Roger Backhouse (Contact Author)

University of Birmingham - Department of Economics ( email )

Economics Department
Birmingham, B15 2TT
United Kingdom

Erasmus University Rotterdam (EUR) - Erasmus Institute for Philosophy and Economics (EIPE) ( email )

P.O. Box 1738
EIPE Office, Room H5-23
3000 Dr Rotterdam
Netherlands

Steven G. Medema

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

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