Microeconomics and the Public Economy

Has the growth of the public sector and welfare economics created a Leviathan through which economic efficiency and individual freedom are crushed? The authors examine the debate over the public economy, scrutinizing such problems as constitutional bias, bureaucratic inefficiency and the relative efficiency of the private sector and public economy firms. The authors raise essential theoretical and empirical issues for believers both in the market and the state, concluding that the pendulum of criticism has swung too far against the public sector. While recognizing government failure, they argue that the state should not always be rejected in favour of market solutions.