ABSTRACT
It is very well known that markets work imperfectly and thus produce market failures. However, that governments also work imperfectly and so produce government failures is sometimes inexplicably forgotten or, better yet, weirdly apologized for. People naturally presume that economic actors are selfish and so will – ostensibly – tend not to contribute to the public good. But political actors are somehow assumed to be usually very concerned with the public interest, which is why – ostensibly – they only rarely, i.e. when something goes terribly wrong, fail in protecting it. This chapter argues that this is a lopsided view of how the social world works. By setting the basic motivations behind politicians’ behaviour shoulder to shoulder with those of economic actors, it investigates various forms of government failure having to do with rent-seeking, regulatory capture, the principle of concentrated benefits and diffused costs, etc. The chapter presents the standard sociological critique of such public choice theorizing, and responds to the critique by reviewing the experimental and statistical evidence on how self-interested or altruistic people are, and whether politicians are responsive to incentives. The chapter concludes with an explanation of why (rich) democracies experience less government failure than dictatorships.
