Should We Expect Government Policy to Be Pareto Efficient?: The Consequences of an Arrow-Debreu Economy with Violable Property Rights

Abstract

To address the question, "Should we expect government policy to be efficient?" at its roots, I modify the well-known Arrow-Debreu private ownership economy, allowing property rights to be violable. The result is that equilibria tend to be Pareto inefficient.Pareto efficiency, property rights, Research Methods/ Statistical Methods, D72, D78,