In the new economics of organization, politicians and bureaucrats are understood as characteristically seeking perquisites of office. Up to now, state governments' policies have hardly been affected by the new economics. Monopolies, public and private, are unresponsive and gouging. Bureaus tend, inherently, to clumsiness and waste. Market failure yields inefficiency and unfairness.
Government failure yields inefficiency and unfairness.
The new economics also identifies a defect of much policy re- search. Much has been reamed about what characterizes effective schools, welfare programs, and other government activi- ties. The unexamined presumption behind the policy research was that the knowledge it produced would be put to use, while, in fact, much of it has been ignored. Giving people information about how to be more productive does not mean they will use that in- formation. We do not necessarily nut into action what we know works.