The General Theory of Second Best

Lipsey, Richard G.; Lancaster, Kelvin

doi:10.2307/2296233

Cited by 1,580 publications

(519 citation statements)

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“…This results in an environment where poorly coordinated policies, policies that directly oppose one another, or policies that are implemented in law but not enforced in practice can and do exist simultaneously. This leads to a policy environment that is sometimes characterised as being of a "second-best" nature ( [49] and [50]), in contrast to the idealised "first-best" policymaking often found in models.…”

Section: Behavioural Dynamics Between Actors and Institutionsmentioning

confidence: 97%

“…Researchers engaged in advising policymakers should caution strongly against this trend and encourage analysis that embraces key uncertainties and encompasses a diversity of outcomes, including the potential for policy failure. In this context, ESOMs are powerful tools for normative assessment of decarbonisation pathways but there is an increasing need for more exploratory analysis aimed at investigating the dynamics of future energy transitions and assessing climate target feasibility in so-called "second best" worlds where political factors render certain market failures impossible to correct [49].…”

Section: Implications For Research and Science-policy Discoursementioning

confidence: 99%

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Actors behaving badly: Exploring the modelling of non-optimal behaviour in energy transitions

2017

Energy Strategy Reviews

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There are real political and social barriers to climate mitigation that arise from multiactor dynamics and micro-economic decisions. Exploratory analysis that captures key uncertainties in the energy system, including behaviour, is crucial for policy design aimed at achieving ambitious greenhouse gas (GHG) mitigation targets. This paper explores the case for developing policy assessments that include non-optimal behaviour in energy systems modelling. A stochastic system dynamic model of the energy system that features multiple actors with differentiated behaviours is used to investigate energy transition pathways that deviate from strict economic rationality. The results illustrate the risks of basing GHG reduction strategies on analysis that overlooks key insights into decision making from fields such as behavioural economics and political science. KeywordsEnergy systems modeling; climate policy; decarbonization; behavioral economics; uncertainty; Highlights• Dynamic stochastic model of energy transitions used to explore actor behaviour • Uncertainty analysis explores impact of sub-optimal actor choices and policies • Behaviour could be as significant as the techno-economic drivers of transitions • Climate targets difficult to achieve without idealised assumptions about behaviour • Energy systems modelling must expand consideration of socio-political factors

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Section: Behavioural Dynamics Between Actors and Institutionsmentioning

confidence: 97%

Section: Implications For Research and Science-policy Discoursementioning

confidence: 99%

Actors behaving badly: Exploring the modelling of non-optimal behaviour in energy transitions

2017

Energy Strategy Reviews

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“…The theory of the second best indicates it might be better to have both distortions rather than only one. Lipsey and Lancaster (1956) actually use a tax illustration where a tax on one good distorts prices between that good and other goods. To achieve a second best optimum, a system of taxes on other goods and services would be needed, some of which would be less than and some more than the original tax and in some cases a subsidy might be needed.…”

Section: Theory Of Second Bestmentioning

confidence: 99%

The Difficulties of Achieving Successful Tax Reform

James

2016

Handbook of Research on Public Finance in Europe and the MENA Region

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This chapter sets out the issues that should be considered in developing successful tax reform. Economic theory makes an essential contribution to the development of tax reform, incorporating issues of both economic efficiency and equity. However, other theoretical considerations demonstrate that successful tax design may be considerably more difficult than seems to be widely thought. In addition, there are matters of tax administration and compliance that have to be taken into account. The changing socio-economic environment within which tax systems have to operate as well, as the political process of tax reform, are also important. Finally, the chapter shows how to develop a systematic approach which can incorporate the many important issues that should be included in developing successful tax reform.

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“…Le problème, c'est que dès qu'une condition n'est pas remplie et qu'il existe un échec de marché, des interventions exogènes sont nécessaires pour rétablir la coïncidence entre équilibre et optimal, et il est faux de penser qu'un marché « presque idéal » peut être corrigé par une intervention étatique « presque nulle ». La présence du moindre échec de marché peut exiger des interventions institutionnelles importantes afi n de rétablir la coïncidence entre l'équilibre et l'optimalité (Lipsey & Lancaster 1956-1957. Il est important de mentionner qu'il n'est pas garanti que de telles interventions exogènes produiront ou nous rapprocheront d'une situation optimale.…”

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Justice et politiques linguistiques : pourquoi les laisser-fairistes devraient exiger des interventions de l’État

Robichaud

2012

philoso

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La neutralité bienveillante est parfois considérée comme la seule politique linguistique compatible avec l’impératif de neutralité de l’État libéral. Un argument en faveur d’une telle position est celui de la coïncidence entre l’équilibre des choix individuels et l’optimalité des résultats. Nous démontrons que la présence d’échecs de marché (externalités et asymétrie d’informations) empêche cette coïncidence sur le marché linguistique et que des interventions étatiques, dont la nature demeure à préciser, sont alors nécessaires pour rétablir cette coïncidence.Benign neglect is sometimes considered the only language policy available for a neutral liberal state. An argument supporting this position is the coincidence of choices equilibrium and results optimality. We show that market failures (externalities and asymmetrical information) on the linguistic market breaks this coincidence and therefore that some state interventions are legitimate even from a laisser-faire framework

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The General Theory of Second Best

Cited by 1,580 publications

References 0 publications

Actors behaving badly: Exploring the modelling of non-optimal behaviour in energy transitions

Actors behaving badly: Exploring the modelling of non-optimal behaviour in energy transitions

The Difficulties of Achieving Successful Tax Reform

Justice et politiques linguistiques : pourquoi les laisser-fairistes devraient exiger des interventions de l’État

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