Welfare state

Debates about the roles of markets and government are often framed as a binary choice between two polar cases, and often in ideological terms. This chapter recognises a spectrum, ranging from markets with light regulation (weights and measures) to heavy regulation (pharmaceutical drugs). I argue that it is useful to analyse the types and extent of government interventions as a mosaic comprising multiple objectives, multiple ways in which governments can intervene, multiple reasons why markets, including insurance markets may fail, and why governments may fail.