March, 2018

Economics and Public Administration

  • Peter J. Boettke

    Director, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics
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Find the article at the Southern Economic Journal online.

What is the role of the state in economic development? This question has puzzled thinkers since before Adam Smith. And economists even to this day continue to puzzle this question, for what else is the contemporary discourse over state capacity in development other than a continuation of this centuries-long conversation? What is needed in the effort to move the conversation along is to unpack Adam Smith's claim that all that is needed is a “tolerable administration of justice.”

In order to do that, however, we need to revisit the analysis of public administration. There are, of course, several layers to that analysis. At one level, we must first and foremost determine what is the appropriate scale and scope of governmental action. This is not just a question of deciding on what the appropriate public policy would be, but also who will possess the appropriate decision-making authority entrusted with the implementation of public policy. Whether this occurs at the local, state, federal, or international level is just one question that must be addressed.We must also consider the particular content of policies, their implementation and their management. My conjecture is that how the economics discipline answered these questions of public administration in the years between Adam Smith and Paul Samuelson dictated the character of the economic science that was practiced. And, it continues to do so till today.