MARKET FAILURES AND STATE FAILURES. MARKET REGULATION VERSUS PUBLIC REGULATION
MARKET FAILURES AND STATE FAILURES. MARKET REGULATION VERSUS PUBLIC REGULATION

Summary/Abstract: The paper commences with the formulation of institutional dichotomy: imperfect market versus imperfect state and, subsequently, with accepting the assumption of the common interdependence between market failures and state failures, as well as the related correlation between market and public regulation. In accordance with fundamental neoclassical premise, the aim of the latter is not to replace the market but improve it in a broad sense, within its coordinating and optimizing functions. Market failures and state failures, as well as their interdependence, are analyzed in the context of “market paradigm” and public regulation whose specific definitions are proposed in Section 2. Resulting from those definitions, public regulation becomes ipso facto an immanent component of the neoclassically understood market paradigm. The author recognizes general and specific market and state failures and briefly discusses them. The failures concerned are also analyzed in the light of the economic theory of public regulation (Section 3).

• Details
• Contents