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The theory of government failure

Le Grand, Julian (1991) The theory of government failure. British Journal of Political Science, 21 (4). pp. 423-442. ISSN 0007-1234

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Identification Number: 10.1017/S0007123400006244


This article outlines a theory of government failure that parallels the more well-established theory of market failure. It builds on the work of the public choice school concerning the behaviour of governments under the assumption that all relevant agents pursue their selfinterest. It examines the theoretical consequences for efficiency and equity of three kinds of government activity: provision, subsidy and regulation. The conclusion is reached that all three may create inefficiency and inequity, but that the form and magnitude of the failure will differ with the type of activity; hence it is important that the three are distinguished. It is also emphasised that the extent of government failure in each case (and whether it is greater or smaller than the corresponding areas of market failure) is ultimately an empirical question, not a theoretical one.

Item Type: Article
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Additional Information: © 1991 Cambridge University Press
Divisions: Social Policy
LSE Health
Subjects: J Political Science > JC Political theory
Date Deposited: 27 Mar 2008 15:17
Last Modified: 18 Feb 2021 00:07

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