Merit goods are a category of goods, introduced in the debate by Musgrave (1957), which individuals tend to under- or over-consume because their preferences are “irrational” or “defective.” This leads individuals to make suboptimal choices, which are detrimental to their well-being. Now, if they exist, merit goods must be produced by the government that must so to speak force individuals to consume the correct amount of these goods. In other words, the government must behave paternalistically.
The concept of merit goods was a precursor to the debates on paternalism within welfare economics. In particular, the interpretation of the merit goods concept through the meta-preferences approach helps in legitimizing legal intervention and achieving a more efficient regulation.
When Musgrave introduced the term “merit goods” (originally called merit wants), it was in an attempt to create a normative definition for government functions. Nevertheless, only three of the functions he studied in...
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