ABSTRACT
The paper overviews the classical liberal framework for thinking about the proper scope of government functions and their proper allocation to different levels in a federal system. The similarities and differences to the standard economic approach based on market failures are explored. I cover three key questions: (1) Which goods should be produced by government, or funded by government but produced by markets, or be left entirely to markets? The distinction between private-public-partnerships, vouchers, and cash transfers is also discussed. (2) How should various markets be regulated – by legislatures, by regulatory agencies, by tort law, or by market mechanisms like reputation, certification, and accreditation? (3) Given some answers to the first two questions, at what geographical scale should the government intervention happen?
Tarko, Vlad, The Structure of Government (February 10, 2024) in Routledge Handbook of Classical Liberalism, edited by Mario Rizzo, Richard Epstein, and Liya Palagashvili.
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