Open AccessA note on coase versus pigou: institutionalism versus interventionism
Author(s) -
Chris Coeck
Publication year - 2000
Publication title -
prague economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.233
H-Index - 17
eISSN - 2336-730X
pISSN - 1210-0455
DOI - 10.18267/j.pep.91
Subject(s) - coase theorem , pigou effect , interventionism (politics) , externality , economics , economic interventionism , institutionalism , positive economics , neoclassical economics , intervention (counseling) , keynesian economics , transaction cost , microeconomics , law , politics , political science , psychology , international relations , psychiatry
A sharp distinction can be observed between A. C. Pigou and R. Coase regarding the solution of externality problems. Pigou advocated government intervention to solve externality problems whereas Coase remained sceptical about the efficiency and efficacy of intervention procedures and mechanisms. However, a much broader perspective should be adopted and the significance of different elements and building blocks of the scientific work of both authors has to be included in the analysis. This note attempts to concentrate on the existing differences between A. C. Pigou and R. Coase, by relying upon the original contributions of these authors. As a result of the observed divergence between both theories, a focus on the difference between institutionalism and interventionism is instrumental to this article.