Public-value failure: When efficient markets may not do

Barry Bozeman

Research output: Contribution to journalArticlepeer-review

289 Scopus citations


The familiar market-failure model remains quite useful for issues of price efficiency and traditional utilitarianism, but it has many shortcomings as a standard for public-value aspects of public policy and management. In a public-value-failure model, I present criteria for diagnosing values problems that are not easily addressed by market-failure models. Public-value failure occurs when: (1) mechanisms for values articulation and aggregation have broken down; (2) "imperfect monopolies" occur; (3) benefit hoarding occurs; (4) there is a scarcity of providers of public value; (5) a short time horizon threatens public value; (6) a focus on substitutability of assets threatens conservation of public resources; and (7) market transactions threaten fundamental human subsistence. After providing examples for diagnosis of public-values failure, including an extended example concerning the market for human organs, I introduce a "public-failure grid" to facilitate values choices in policy and public management.

Original languageEnglish (US)
Pages (from-to)145-161
Number of pages17
JournalPublic administration review
Issue number2
StatePublished - 2002
Externally publishedYes

ASJC Scopus subject areas

  • Sociology and Political Science
  • Public Administration
  • Marketing


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