… is from page 81 of Vincent Ostrom’s and the late economics Nobel laureate Elinor Ostrom’s 1977 paper “Public Goods and Public Choices,” as this paper is reprinted in Polycentricity and Local Public Economies (M.D. McGinnis, ed., 1999):
But recourse to coercive sanctions and governmental organization does not provide both the necessary and sufficient conditions for the delivery of public goods and services under relatively optimal conditions. Instruments of coercion can be used to deprive others and make them worse off rather than better off. Governmental institutions permit those who mobilize majority support to impose deprivations upon those in the minority. Governmental institutions can become instruments of tyranny when some dominate the allocation of goods in a society to the detriment of others.
Furthermore, difficulties in measuring the output of public goods and services imply that governmental officials will have difficulties in monitoring the performance of public employees. Management of public enterprises will be subject to even less effective control than the management of private enterprises where outputs can be measure in quantifiable units.
DBx: Yes. And so why do those who call for government ‘correction’ of market failures (real and imaginary) almost never ponder the government failures that are oh-so-likely with collective action in which agents of members of winning coalitions can use coercion against members of losing coalitions? Why the blind faith that empowering people to exercise coercion over others – giving power to people whose actions are checked only by occasional, if regularly scheduled, majority-rule elections – will result in correction of market imperfections without off-setting, or without even much greater, imperfections springing from the use (not to mention the abuse) of power?