The Political Economy of Paradigmatic Policy Change

Abstract

Chapters 2 and 3 traced developments within those streams of economic theory which are centrally concerned with ascertaining an appropriate role for government in a mixed market economy. Chapter 2 examined how welfare economics can provide a rationale for an incremental interventionism by governments seeking to correct various sources of market failure. It also considered the grounds for a growing scepticism about the capacity of governments to effectively perform this role. This scepticism has been reinforced by both positive and normative theories of government failure of the type examined in Chapter 3. Chapter 4 then considered the contribution those literatures that have made to the ‘New Public Management’ (NPM) and focused on the extent to which the public sector reforms associated with this approach can be viewed as solutions to problems of government failure.