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From "Failures of the Market" to "Failures of the State": Once Again to the Question of Social Justice in Economy

From "Failures of the Market" to "Failures of the State": Once Again to the Question of Social Justice in Economy

Journal of Economic Regulation, , Vol. 7 (no. 2),

Principles of social justice don't belong only to area of morals, their practical embodiment in economy and the social sphere determines the content and a configuration of institutional system. Ensuring equal opportunities, investment into the human capital, elimination of disproportions in distribution in the direction of bigger compliance of private and public profits play a crucial role in neutralization of "failures of the market". In the paper it is shown that actions of market forces in modern Russia are insufficiently balanced by actions of the state institutes for control of an excess inequality, creation of the competitive environment and counteraction to rent-seeking behavior of certain players. In the country there was unfairly high level of differentiation of the population according to the income which formation is influenced by the institutional environment, there is a process of an institutionalization of poverty. The corresponding quantitative estimates and intercountry comparisons confirming this conclusion are given in the paper. It allows to talk about "failures of the state" and signs of "standard capture" in modern Russia. In the paper the conclusion is drawn that such situation when institutional and market mechanisms in common work for restriction of equal opportunities and increase in distinctions in the level of the income and wealth can't allow. Coordinated actions on change of the situation which can provide minimization of failures of the state are necessary. These actions are in a foreshortening of a question of restoration of social justice.

Keywords: «failure of the state»; «failure of the market»; social institutions; social justice; excess inequalities; equal opportunities; progressive taxation; ofshorization.

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