Distinguished Lecture on Economics in Government

The Private Uses of Public Interests: Incentives and Institutions

Dados Bibliográficos

ID4999745
AutoresJoseph E Stiglitz (0000-0001-6149-046X, World Bank, autor correspondente), Joseph Stiglitz (Senior Vice President and Chief Economist, World Bank, Washington, D.C..)
Ano1998
Volume12
Fascículo2
Páginas3-22
Data de publicação1998-05-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Journal of Economic Perspectives (JOURNAL)
Identificadores do periódicoISSN: 0895-3309 • E-ISSN: 1944-7965
EditoraAmerican Economic Association (PUBLISHER • US)
DOI10.1257/jep.12.2.3
OpenAlexW2163891429
IdiomaEN
Citações recebidas53
Referências citadas12

Joseph Stiglitz was a member of the Council of Economic Advisers from 1993-95, and chairman of the CEA from 1995 through February 1997.] Today, I want to share with you some of my thoughts about the possibilities and limitations of government. These thoughts are focused around a simple question: Why is it so difficult to implement even Pareto improvements? Working in Washington, I quickly saw that although a few potential changes were strictly Pareto improvements, there were many other changes that would hurt only a small, narrowly defined group (for example, increasing the efficiency of the legal system might hurt lawyers). But if everyone except a narrowly defined special interest group could be shown to benefit, surely the change should be made. In practice, however, "almost everyone" was rarely sufficient in government policy-making and often such near-Pareto improvements did not occur. My major theme will be to provide a set of explanations for why this might be so. I shall put forward four hypotheses in this lecture, each of which provides part of the explanation for the failure in at least one instance of a proposed Pareto improvement. These hypotheses, like much of the literature on government failures, focus on the role of incentives: how misaligned incentives can induce government officials to take actions that are not, in any sense, in the public interest

Economics · Incentive · Law and economics · Microeconomics · Operations management · Pareto principle · Political science · Public economics · Experimental Behavioral Economics Studies · Fiscal Policy and Economic Growth · Law, Economics, and Judicial Systems · Public Administration