The concept of market failure was originally presented by economists as a normative explanation of why the need for government expenditures might arise. Gradually, the concept has taken on the form of a full-scale diagnostic tool frequently employed by policy analysts to determine the exact...

The question of the proper role of government in the marketplace is an old and fundamental one. In the search for objective standards by which such decisions can be made, public officials increasingly have turned to the concept of market failure. Use of the market-failure concept is widespread...

In a paper delivered at the December 1955 meeting of the Econometric Society, Paul Samuelson noted that though economists had done "work of high quality and great quantity in the field of taxation," the theory of public expenditure had been "relatively neglected" (1958, 332). Anglo-American...