Government intervention in a dynamic economy

From the late 1970s onwards, the view that government intervention could provide a means of overcoming market failure in advanced was increasingly questioned. For some, intervention was to be discouraged because it interfered with individual liberty. For others, what was problematic was the welfare economist's assumption of an autonomous state acting in the public interest. Finally, there was the issue of the state's ability to achieve what it set out to do. Government failure it was argued was just as pervasive as market failure and no antidote to it. This paper critically evaluates such arguments in relation to competition, industrial change, innovation, and competitive advantage in production.