amounts and targets of the specified objective function, such as the World Bank’s own goal of eradicating extreme poverty (World Bank, 2014). A significant literature has examined how differences in preferences for redistribution, such as, based on differing beliefs and philosophies about the role of luck verus effort and individual responsibility in shaping income inequality, is an important factor explaining variation in the size of government, progressive taxation and spending on welfare of poorer households (Alesina and Glaeser, 2004). How relevant, then, is the notion of government failure— leaders pursuing policies that they know are costly for the greater public good, despite the availability of alternative policies that are likely to yield improved outcomes—for the area of redistributive policies, if there is much less evidence or expert consensus on those “alternative policies” or “improved outcomes”? The World Development Report 2006, Equity and Development (World Bank, 2006), marshals evidence to argue that public policies for equitable access to health, education, and economic opportunity are needed for sustained economic growth for all. Put another way, World Bank (2006) provides evidence consistent with equity of opportunity, and avoidance of extreme deprivation by any sub-group of the population, being public goods, in a similar way as protection of property rights, and institutions to support competitive markets. If any policy maker does not agree with the conclusions about the technical value (for sustained economic growth for all) of redistributive policies, and therefore does not pursue those policies, would that be regarded as government failure in the framework of this paper? If the basis for policy disagreement is sustained by credibly non-partisan technical analysis of economic data, it would not. However, if policy making in contentious areas is influenced by incentives of leaders to extract private rents, for themselves or for the interest groups to whom they are beholden, and these leaders deliberately ignore technical evidence on social costs in order to preserve private rents, that constitutes government failure.<sup>8</sup> This paper builds on the analysis in World Bank (2016) and characterizes “good” versus “bad” policies as the extent to which policies confer private benefits at the expense of the greater public good. I define a policy index— _p_ —to capture the degree of inequality in the incidence of benefits from public policies, akin to the Gini coefficient for income equality. Like the Gini coefficient, the value of _p_ lies between 0 and 1, with 0 representing perfect equality, when the incidence of benefits from public policies is spread universally, and 1 representing perfect inequality—when the benefits are captured by a small segment of the population.

Unlike the Gini coefficient, which reflects inequality in the distribution of a fixed amount of resources, the policy index proposed here reflects a trade-off between allocating public resources to provide private consumption versus investment in a public good that yields greater social returns whose benefits are universally shared. Values of _p_  0 reflect equality in distribution of benefits; but importantly, the origins of these universally shared benefits come from investments in public goods that generate social value. Values of _p_ >0, reflect the opposite, of public spending on private goods, even if they are distributed equally (such as, to continue the earlier example, if subsidized electricity were distributed 8 Outcomes in other areas of contentious policy-making that go beyond economics—such as gun control, or environmental policies to combat climate change—may also be partly explained by knowledge limitations and disagreement based on technical analysis of data. But I would argue that the notion of government failure defined in this paper would nevertheless be relevant. Government failure in these cases would look like the following: despite government leaders having access to expert evidence that points to the benefits of some policy reforms that they can all agree upon, those reforms are not undertaken because the political process becomes gridlocked by partisan considerations.

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