engleski

Is it justified to speak of government vs. market failure? A step into a more coherent world

Financial panics and recessions have been an integral part of capitalism. The modus operandi of the capitalistic system is only under threat when the reckless appear to be the beneficiaries of the crisis they have caused, while the rest of society bears the burdens of their recklessness. In that case it can be said that the crisis of legitimacy is looming in the air. Some economists depending on their ideological posture claim that this can be attributed to either market failure or government failure. But this dualism conceals the underlying complexity as markets are not natural entities but the result of political decisions. A similar view is also valid for political system that creates the allocation of risk that allows markets to function. Relying on these insights this article seeks to analyse the ongoing global economic and political crisis by examining global governance failure.

Institutions; market failure; government failure; global governance failure

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