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Failure of Public Production
The failure of public production is usually dealt with by the adoption of one or more of the following approaches:
(i) Exit possibilities yielding place to market forces and consumer choice;
(ii) Allowing scope for client participation thereby providing a distinct role for public voice; and
(iii) Loyalty i.e., a structure in which significant weightage to responsibility is accorded.
The broad aim is to generate benefits to the society by unleashing forces of competition to create an optimally functioning market. The approach is centred around the core tenet of neoclassical economics that, if certain conditions are met, competition produces an equilibrium in which it is impossible to make someone better off without making someone else worse off.
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