Economics of the Welfare State 5th by Nicholas Barr
ISBN 9780199297818
Th ough slightly daunting to realize that this edition appears 25 years aft er the book was fi rst
published, it is pleasing that the book continues to be useful, notwithstanding the huge
changes over the years. In 1987, the Communist threat was still regarded as very real and,
perhaps as a result, discussion of the market versus the state was largely an ideological punch
up between the two polar extremes. With the end of the cold war came a more balanced view.
Th e considerable advantages of private markets for most commodities is appreciated in the
former Communist countries, many of them now members of the European Union, while
governments in the West became more aware that unregulated markets are not always and
everywhere a complete answer. Th at realization grew out of scandals over mis-sold pensions
and the continuing problems of fi nancing health care in the USA, and was reinforced by the
economic crisis in the years aft er 2007, whose roots lay in inadequately regulated fi nancial
markets. Such systemic risks, it can be argued, are, if anything, intensifying, for example,
climate change, natural disasters, technological accidents, infectious diseases, and food
safety. Actuarial insurance cannot readily address problems of this type or on this scale.
