The market failure ideology of our time
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Market failure ideology might be the new common ideology of our time. With high taxes and an unwillingness to experiments in public sector services it seems like market failure has become the "default state" of the Swedish debate around the development of the public sector. Presentation today at Kvalitetsmässan enclosed above. We should try to look away from teh simplified dichotomy of public/private and look into the hybrids in-between the categories. Combinations of models and experimentation are important aspects of a dynamic development.
Transcript of The market failure ideology of our time
The market failure ideology Björn Hasselgren, PhD
GPMS 2013 Gothenburg November 20, 2014
Standard model of public and private goods
Market failure?
Market failure?
Government
failure?
Government
failure?
The rise of markets and the ”tax state”
(Schumpeter, 1918)
Autocracies
Govern-
ment
Markets
Study
object
Private and public squares
(Wagner, 1997/2007)
- Private ownership - Collective ownership
- Voluntary - Coercive
- User financing - Tax financing
- Agreement - Regulation
Private
square
Public square
How do we perceive the society?
The entangled reality
(Wagner)
Private
square
Public square
Cooperation and polycentrism is the normal pattern
What happens in-between the dichotomy’s categories is
important and should be better understood
Self-sustaining process of government
interventionism – a ‘market failure stance’
Large scale systems, distributive policies
and/or perceived monopoly tendencies
Regulation/
Nationalization
MC-pricing or tax financing
Government subsidies and high
taxes = high share of public servants in the
electorate
Market failure talk is persistent - why?
- High taxes a sign of market failure ideology
- Market failure talk gives a simple model for analysis
- Market failure ideology is self sustaining
- Interest groups protect and support market failure ideology
What to do?
- Analyze and understand the presence and origin of market
failure ideology
- Better understanding of the entangled reality and the
public-private cooperation is important
- Make a distinction between politics and production of
services and good
Björn Hasselgren, PhD
KTH Royal Institute of Technology
+46-70-762 33 16
www.kth.se/blogs/hasselgren
@HasselgrenB
