ABSTRACT
The entry summarizes a modern view of the desirable scope of government provision of goods and services. First examined is the case of benevolent government. That is, we begin by assuming that the government acts to maximize society's welfare. The basic conclusion flowing from both modern theory and experience is that even in this instance, the case for government provision is weak. This point is further supported once it is recognized that governments often fail to maximize society's welfare. For example, privatization can be viewed as a key means to weaken the coercive powers of the state and to depoliticize enterprise operations. The final section reviews key evidence on comparative enterprise efficiency.
