PUBLIC CHOICE ECONOMICS: A CRITICAL REVIEW OF THE LITERATURE ON MARKET FAILURE, GOVERNMENT INTERVENTION AND ARROW THEOREM

Authors : Stephen ONIFADE, Mehmet Okan TAŞAR

Pages : 70-84

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Publication Date : 2020-04-30

Article Type : Research Paper

Abstract :This paper provides a critical review of the literature on public choice economics by highlighting some of its intriguing complexities to include issues like market failure and government intervention, rent-seeking activities with individual and collective interest, and Arrow’s impossibility theorem. The review of some existing literature shows that even when there is a collective goal that seems to bind up the general public in a society, individual interests might jeopardize the actualization of such collective goals and in some cases, some individuals can even go ahead to device means to exploit private gains from the privileges of public offices; a situation that is commonly refers to as rent-seeking. Furthermore, the Arrow impossibility theorem argues that collective interest cannot be taken as a mere aggregation of individual interest as it might be presumed in the ordinary sense and this theorem has provided a huge basis upon which many important contributions in the field of public choice economics are founded.
Keywords : Public Choice, Market Failure, Government Intervention, Rent Seeking, Arrow Theorem