ABSTRACT
As discussed in the introductory chapter and in many of the other contributions to this volume, a number of trends have come together in recent years leading to a shift away from the traditional centralized, top-down, technocratic model of how national governments function to a more fluid, decentralized and participative model of governance. However, it is recognized that national governments still have a key role to play within this new landscape, but face the challenge of trying to shape the context and manage complexity and plurality rather than being able to control other actors more directly. This raises the question of the rationale for government interventions in this changed arena. This chapter explores how ideas from innovation systems (IS) thinking have begun to explore the idea of ‘systems failures’ as a rationale for public policy intervention, which includes, but goes beyond, the traditional idea of ‘market failure’. The market failure approach is based on mainstream neo-classical economic thinking, and this language, and the ideas that it incorporates, are still largely used by policy makers.
