Benevolent dictatorship

Well-meaning Ender dictator is in economics the theoretical model of a state that leads in the case of a planned economy or in the event of market failure to a Pareto optimum and a maximum benefit of traders. The model is used (as well as the model of Homo economicus ) exclusively to abstraction and explanation of basic economic relationships. A concrete economic, social or political order is not described with this model. For the theory that a dictatorship better than a market economy contributes to economic development, see development dictatorship.

Definition and meaning

The well-meaning dictator called a ( fictional) State handlebar that have entirely without self-interest sole objective is the maximization of economic agents. He is independent of all political influences ( the particular interests represented ), has omnipotence and benevolence, and is therefore called a well-meaning Ender dictator. He is exclusively rational and has (full) information, including partial information on the preferences of all economic operators.

Application

Crux of the use of the model is the theory of market failure. In cases of market failure, it makes sense that the state takes corrective action. If the government here pursue non-economic goals, follow the wishes of interest groups rather than the public interest ( which should in practice be the normal case ) or simply do not have the necessary information ( how should the state have information about the preferences of the citizens? ), Would suboptimal effects of the market are replaced by random state. Therefore, ceteris paribus, it is assumed that the state is acting as a benevolent dictator.

New Political Economy

The New Political Economy examines the effects if the state does not behave as a benevolent dictator.