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I have been interested lately in a paper Bill Keech and I were working on a decade ago,

It was called "The Anatomy of Government Failure."

Was AC Pigou the first "Public Choice" theorist?

There are two transaction costs problems in the background:
1.  Information asymmetries and the problem of ignorance
2. Incentive problems and institutional design

Market failure is actually a thing. And it can be complicated: Kleinman and Teles, "Market and Non-Market Failures."

But so is government failure.  There is no reason to expect government action to be Pareto Optimal. 

The problem is that every flaw in consumers is worse in voters!

It could even be argued (I did!) that a "good" industrial policy is impossible in a democracy.

Book o'da week:  The Next American Economy: Nation, State, and Markets in an Uncertain World . 2022, Encounter Books.  by Samuel Gregg. 

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz