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 6: Policy conflicts: the case of healthcare

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


Despite what is assumed in much of the economic literature, an exception being institutional economics, policies are not fully plastic and cannot be sufficiently tailored in order to regulate a practice in all its manifestations or relevant aspects. Policy conflicts result from this. In this chapter we discuss conflicts between instituted policies regulating a practice, rather than conflicts between groups, or classes, of individuals who have an interest in particular policies taking a particular shape. We recognize these are significant, but distinct, dimensions that have received extensive attention in the literature. However, we wish to identify and investigate further the recognized, but under-emphasized aspect of ‘practice’. We argue this complements the class and group based conflict analysis, and represents a further dimension of potential conflict. In this chapter we identify five distinctive sources of policy conflict. We discuss two particular sources of policy conflict in particular, emphasizing historical contingency and emergence of institutions in the specific setting of market oriented reform in healthcare as a means of indicating that the policy conflicts are real and can have substantial influence on activities in this practice. In many countries around the world elements of market orientation are introduced or extended into healthcare. The consequences of the policies may not be as expected as a result of policy conflicts, and may not be uniformly beneficial as a consequence.

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