Lahore Journal of Economics Special Edition
September 25, 2013
The keynote address was given by Jeffrey Hammer who spoke on governance and service delivery. The speaker outlined how market limitations in service delivery can be matched by appropriate government interventions, though the level of intervention has to be based on a careful analysis of the limitations of each sector as well as country circumstances. This paper outlines how limitations of the market can be matched to appropriate interventions by government as it actually performs, not as it is hoped to perform. This matching will, by necessity, vary with country circumstances.
While pure public goods must be provided by government regardless of its weaknesses and pure private goods should generally be left to the market, most serious policies operate in between. The balance of the limitations of the sectors needs careful analysis. The welfare costs of private market failure are rarely measured and the difficulties of implementing different policies are rarely discussed let alone quantified. Policies that are sensitive to deviations from perfect implementation should be avoided in preference to those that are more robust to circumstances. Further, every policy will generate interest groups that will constrain future decisions through political pressure.
While pure public goods must be provided by government regardless of its weaknesses and pure private goods should generally be left to the market, most serious policies operate in between. The balance of the limitations of the sectors needs careful analysis. The welfare costs of private market failure are rarely measured and the difficulties of implementing different policies are rarely discussed let alone quantified. Policies that are sensitive to deviations from perfect implementation should be avoided in preference to those that are more robust to circumstances. Further, every policy will generate interest groups that will constrain future decisions through political pressure.
Dr. Hammer also discussed examples from various sectors, including health, where interventions vary from nearly pure public goods through nearly pure private goods to the complicated set of issues raised by insurance market breakdowns and education (particularly in Pakistan) where the government should be challenged to question fundamental assumptions concerning its responsibility.
Read online here.
Labels: Lahore Journal of Economics, Publications
posted by S A J Shirazi @ 9/25/2013 11:34:00 AM,
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