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Public‐Value Failure: When Efficient Markets May Not Do
Author(s) -
Bozeman Barry
Publication year - 2002
Publication title -
public administration review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.721
H-Index - 139
eISSN - 1540-6210
pISSN - 0033-3352
DOI - 10.1111/0033-3352.00165
Subject(s) - market failure , economics , value (mathematics) , public economics , scarcity , public value , intrinsic value (animal ethics) , public policy , government failure , microeconomics , business , public administration , political science , economic growth , machine learning , computer science , law
The familiar market‐failure model remains quite useful for issues of price efficiency and traditional utilitarianism, but it has many shortcomings as a standard for public‐value aspects of public policy and management. In a public‐value‐failure model, I present criteria for diagnosing values problems that are not easily addressed by market‐failure models. Public‐value failure occurs when: (1) mechanisms for values articulation and aggregation have broken down; (2) “imperfect monopolies” occur; (3) benefit hoarding occurs; (4) there is a scarcity of providers of public value; (5) a short time horizon threatens public value; (6) a focus on substitutability of assets threatens conservation of public resources; and (7) market transactions threaten fundamental human subsistence. After providing examples for diagnosis of public‐values failure, including an extended example concerning the market for human organs, I introduce a “public‐failure grid” to facilitate values choices in policy and public management.