Government failure - Four types

Wilfred Dolfsma*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

9 Citations (Scopus)


Economists tend to see the market as a default option for social order and a role for government only when markets fail. Developing a convincing analysis of the role of government in economic processes, however, needs to start by considering government failure in its own terms. Drawing on insights from institutional economics, law and economics and the philosophy of law, emphasizing the necessity of rules for the economy, this paper develops the concept of government failure. The paper identifies and develops four different types of government failure. Government can set rules for economic processes and actors that are (1) too specific, (2) too broad, (3) that are arbitrary, or (4) that conflict with other rules it has set out to address other, related issues (possibly primarily non-economic). Government failure is illustrated in the context of Intellectual Property Right (IPR) law as it relates to Anti-Trust law.

Original languageEnglish
Pages (from-to)593-604
Number of pages12
JournalJournal of Economic Issues
Issue number3
Publication statusPublished - 8 Dec 2014
Externally publishedYes


  • anti-trust law
  • government
  • government failure
  • intellectual property rights
  • rules in the economy

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