Market theories and regulation: why do markets and governments fail?

Abstract

As a rule regulation, inspired by neoclassical economics, is a response to market failures, which are in disagreement with the ideal of a competitive market, especially in the sectors of public goods. It is interesting to note that regulation is also subject to failures, called government failures. After all, why do markets and governments fail? The answer to this question involves a deep conceptual discussion on markets and competition. The aim of this paper is to present the theoretical debate surrounding market approaches, especially in the heterodox field, which include the views of evolutionary economics, Austrian school and the modern economic sociology. The conclusion is that the neoclassical theory, compared to these approaches, has a restricted view of the competition process.