Reflections on the general theory of second best at its golden jubilee

@article{Lipsey2007ReflectionsOT,
  title={Reflections on the general theory of second best at its golden jubilee},
  author={R. Lipsey},
  journal={International Tax and Public Finance},
  year={2007},
  volume={14},
  pages={349-364}
}
  • R. Lipsey
  • Published 2007
  • Economics
  • International Tax and Public Finance
Abstract The origin of the second best article is described and criticisms assessed. Distortions making impossible the achievement of either first or second best optima are outlined. Attempts to establish the applicability of first best rules are criticised, as are general rules for making piecemeal efficiency improvements. Both often use models containing empirically invalid assumptions and a selected few of the full set of distortions. Practical policy advice requires more parochial objective… Expand
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References

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There is an important basic similarity underlying a number of recent works in apparently widely separated fields of economic theory. Upon examination, it would appear that the authors have beenExpand
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This paper first develops a political model rationalizing conventional second-best constraints on the controllability of certain sectors despite the perfect governmental information assumptionsExpand
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While acknowledging the successes of modern economics, this paper concentrates on some shortcomings. Many are traced to a single source: the great insights of economics are all qualitative. EconomicsExpand
Towards a Theory of Third‐Best
The theory of second best (Lipsey & Lancaster [Lipsey R. G., 1956]) shows that the presence of irremovable distortions renders the second‐best conditions exceedingly complicated; by satisfying someExpand
The Role of Second-Best Theory in Public Economics
This paper surveys the evolution of the use of the theory of second best in public economics. It argues that much of modern normative public economics can be interpreted as simply applied second-bestExpand
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A Critique of Welfare Economics was first published in 1950. It was concerned with the exposition, criticism, and appreciation of the theory of economic welfare as it had been developed to that date.Expand
Comments on “The General Theory of Second Best”
Lipsey and Lancaster [5] have performed a valuable service in collating and comparing various well-known non-Pareto optimal situations and suggesting that they are all special cases of what they callExpand
Three Basic Postulates for Applied Welfare Economics: An Interpretive Essay
I would like to extend my thanks to my colleague, Harry G. Johnson, for hi8 helpful comments, to Daniel Wisecarver, for help extending well beyond the normal call of duty for a research assistant,Expand
SOME NOTES ON THE THEORY OF SECOND BEST
IF we add further constraints to a maximum problem, then according to the mathematical theory of constrained maxima, the first-order conditions must be expected to be different from what they wereExpand
Welfare Economics and the Theory of Second Best
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