Government Failure

Government Failure

Society, Markets and Rules

Wilfred Dolfsma

This highly unique book takes a fundamental look at when and how a government can fail at its core responsibility of formulating rules. Government, representing society, relates to the economy by formulating the rules within which (market) players should operate. Although market and business failure are much discussed in the economics literature, government failure is often overlooked. This book addresses this gap, exploring in detail what constitutes government failure.

Chapter 1: Introducing government failure

Wilfred Dolfsma

Subjects: economics and finance, institutional economics, law and economics, political economy, public choice theory, welfare economics, law - academic, law and economics, politics and public policy, political economy, public choice, social policy and sociology, economics of social policy


Government, of whatever kind, is supposed to take the interests of all members of society to heart. In a way, that can be seen as the main impetus the Magna Carta of 1215 gave society – it curtailed and steered the mandate of a king so he would not govern for his own good only. Indeed, Thomas Hobbes, in his Leviathan (1651), claimed that Leviathan, or a government, is the only possibility to prevent man from living in ‘continual fear, and danger of violent death’ and making ‘the life of man, solitary, poor, nasty, brutish and short’. While Leviathan is the biblical sea-beast that many equate to the devil himself, and although Hobbes seemed to favour some kind of despotism, harking back to Plato’s Republic (268 bc), Leviathan was considered to have a beneficial effect on society. A government, or individual Principe (Macchiavelli, 1513) in its place, serving society’s interests, can then use whatever means necessary towards both outsiders as well as members of that society itself. Thomas More’s Utopia (1516), in identifying what an ideal society would look like, does not seem to agree with Hobbes that any type of government, issuing any set of rules, would need to be welcomed as long as the rules would apply to any and all.

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