ABSTRACT
We shall argue that market failures are far more endemic than generally assumed. This assertion opens up the question that if the market has to be carefully nurtured, then who should look after this aspect. Hence, this essay is an attempt to clarify the nature of interventions required to restore the market. Alternatively, this discussion may be seen as an attempt at uncovering what the role of governments must include. It would appear that governments, or maybe some outside agencies, have a huge responsibility. A smaller government or a withdrawal from matters of the market will just not do. This matter, apart from being of theoretical importance, has received a great deal of attention over the years; for example, in the last election for the position of the most powerful person in the world, the US president, one of the major points of debate between the two main protagonists was the role of the government. The one who favoured a larger role, won the election but it is not as if the debate has been settled. On the contrary, the positions taken seem to have hardened. And the consequences affect not only the US economy but the entire world. In the circumstances, it seems worthwhile
to investigate matters and clarify exactly what governments should do to enable markets to prosper.
