Market Failure Vs Market Failure Essay

Government Failure
Microeconomics Policy Research and Government Per formance

Market Failure

versus

Clifford Winston
AEI-Brookings Joint Center for Regulatory Studies

Government Failure versus Market Failure
Microeconomics Policy Research and Government Performance Clifford Winston

aei-brookings joint center for regulatory studies
Washington, D.C.

Copyright © 2006 by AEI-Brookings Joint Center for Regulatory Studies, the American Enterprise Institute for Public Policy Research, Washington, D.C., and the Brookings Institution, Washington, D.C. All rights reserved. No part of this publication may be used or reproduced in any manner whatsoever without permission in writing from the Brookings Institution Press, except in the case of brief quotations embodied in news articles, critical articles, or reviews. Government Failure versus Market Failure may be ordered from: Brookings Institution Press, 1775 Massachusetts Avenue, N.W. Washington, D.C. 20036. 1-800/537-5487 or 410/516-6956; E-mail: hfscustserv@press.jhu.edu; www.brookings.edu Library of Congress Cataloging-in-Publication data Winston, Clifford, 1952– Government failure versus market failure : microeconomics policy research and government performance / Clifford Winston. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-8157-9390-8 (hardcover : alk. paper) ISBN-10: 0-8157-9390-1 (hardcover : alk. paper) ISBN-13: 978-0-8157-9389-2 (pbk. : alk. paper) ISBN-10: 0-8157-9389-8 (pbk. : alk. paper) 1. Industrial policy. 2. Microeconomics. I. Title. HD3611.W555 2006 338.5—dc22 2006024066 2 4 6 8 9 7 5 3 1 The paper used in this publication meets minimum requirements of the American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials: ANSI Z39.48-1992. Typeset in Adobe Garamond Composition by R. Lynn Rivenbark Macon, Georgia Printed by R. R. Donnelley Harrisonburg, Virginia

To Joan, HJ, and TH forever in Manoku

Contents

Foreword...