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The Mirrlees Approach to the Theory of Economic Policy

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Abstract

This paper summarizes James Mirrlees' key contribution to the theory of tax policy. It argues that the Mirrlees approach of viewing government as being constrained by imperfect information has changed profoundly how we look at the normative public policy. In this view, asymmetric information provides the limit to redistribution by restricting the efficiency-equity trade-off. It leads to consideration of other policy instruments for relaxing incentive constraints and improving the efficiency of redistributive policies. Some of these instruments include quantity controls, in-kind transfers and public provision or mandating of insurance, things we observe in practice.

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  1. Department of Economics, Queen's University, Kingston, Ontario, K7L 3N6, Canada

    Robin Boadway

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Boadway, R. The Mirrlees Approach to the Theory of Economic Policy. International Tax and Public Finance 5, 67–81 (1998). https://doi.org/10.1023/A:1008668509373

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