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Saving government failure theory from itself: recasting political economy from an Austrian perspective

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  • Peter Boettke
  • Christopher Coyne
  • Peter Leeson

Abstract

The economic approach to politics revolutionized the way scholars in economics and political science approached the study of political decision-making by introducing the possibility of government failure. However, the persistent and consistent application of neoclassical models of economics also seemed to suggest that once the full costs were accounted for, this failure was an illusion. This paper counters these arguments, typically associated with George Stigler, Gary Becker and Donald Wittman, by focusing on the underlying economic theory. We develop an alternative model of political economy grounded in the Austrian conception of the dynamic market process. Copyright Springer Science + Business Media, LLC 2007

Suggested Citation

  • Peter Boettke & Christopher Coyne & Peter Leeson, 2007. "Saving government failure theory from itself: recasting political economy from an Austrian perspective," Constitutional Political Economy, Springer, vol. 18(2), pages 127-143, June.
    • Handle: RePEc:kap:copoec:v:18:y:2007:i:2:p:127-143
    DOI: 10.1007/s10602-007-9017-1
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    References listed on IDEAS

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    1. Rowley, Charles K, 1997. "Donald Wittman's The Myth of Democratic Failure: Review Article," Public Choice, Springer, vol. 92(1-2), pages 15-26, July.
    2. Sutter, Daniel, 2002. "The Democratic Efficiency Debate and Definitions of Political Equilibrium," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 15(2-3), pages 199-209, June.
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    8. Demsetz, Harold, 1982. "Barriers to Entry," American Economic Review, American Economic Association, vol. 72(1), pages 47-57, March.
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    12. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
    13. Peter Leeson & Christopher Coyne & Peter Boettke, 2006. "Does the market self-correct? Asymmetrical adjustment and the structure of economic error," Review of Political Economy, Taylor & Francis Journals, vol. 18(1), pages 79-90.
    14. Demsetz, Harold, 1969. "Information and Efficiency: Another Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 1-22, April.
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    More about this item

    Keywords

    Entrepreneurship; Government failure; Market failure; Market process; Public choice; B52; B53; H11;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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