Market process theory illustrates how the market is the most effective institution for overcoming the knowledge problem. Specifically, the institutional characteristics of private property, monetary prices, and the disciplining mechanisms of profit and loss, guide actors to utilize knowledge dispersed among society, to allocate resources effectively, and to adjust their behavior when errors occur to provide valuable goods and services to society.
The chapters in this manuscript explore, through applications to issues within the United States and internationally, contemporary issues in public policy through the theoretical framework of knowledge problems and market process economics. Utilizing this approach, as well as other fundamental insights from economics, these chapters aim to illustrate how individuals in society address pressing public issues, the problems faced by policymakers, and the potential for novel solutions to policy challenges. Authored by individuals from a variety of disciplines with interests in public policy, this work includes discussions of education, child welfare, urban planning, and U.S. healthcare policy, as well as topics in e-commerce, the Global War on Terror, international trade, and economic development.
Foreword, Boudreaux / 1. Introduction, Haeffele, Hall, and Millsap / 2. Who Plans? Jane Jacobs' Hayekian Critique of Urban Planning, Gray / 3. The Knowledge Problem and Education Finance, Crouch / 4. Centralization of the Child Welfare Systems and the Knowledge Problem, McCray / 5. The Patient Protection and the Affordable Care Act: That Which is Seen and That Which is Unseen, Shupe / 6. An Analysis of Agent Decisions and Institutional Effects in Healthcare, Famodimu / 7. How Reputational Feedback Can Mitigate the Knowledge Problem: Lessons Learned from the U.S., Galata-Bickell / 8. The Knowledge Problem in International Entity Level Taxation, Michel / 9. De-risking and the Knowledge Problem: The Unseen Consequences of Financial Sanctions, Gjoza /10. Trade Openness, Information, Feedback, and Domestic Economic Regulation, Ruhland / 11. Was it Worth It? The Effects of ODA, NGOs, and Time on Local Politics in the Haitian State, DeMattee
Stefanie Haeffele is the Deputy Director of Academic and Student Programs and a senior fellow for the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University.
Abigail Hall is Assistant Professor in Economics at the University of Tampa in Florida and a Research Fellow with the Independent Institute, a non-partisan research and educational think tank based in Oakland, California.
Adam Millsap is the Assistant Director of the L. Charles Hilton Jr. Center for the Study of Economic Prosperity and Individual Opportunity at Florida State University.
Informing Public Policy is an excellent introduction to the insights that market process theory brings to public policy analysis. By utilizing only junior scholars, the editors not only demonstrate the usefulness of market process theory to practitioners, but also scholars.
This volume shows how effective public policy can be made in light of the fact that all relevant information can never be available to inform policy makers. The insights in this book will be valuable to academics and practitioners who are interested in improving the process of making public policy.