A key pillar of IIPP's work will be rethinking how concepts of public value and public purpose can be applied in the real economy, creating a new framework for innovation-led public policy.
- How has the ‘public good’ been framed in economics and governance, and how has this changed over time?
- What are the philosophical underpinnings of the terms public good, social value and public purpose?
- Can an understanding of value as collectively produced influence what is seen as of public value?
- What is a public purpose driven organisation?
- How can the concept of public purpose be operationalised to help direct mission-oriented investments?
In standard economic theory, public policy is justified only if clear market failures are first identified. In this context ‘public goods’ (non-rival, non-excludable activities like clean air, or national defence) are corrections that are made to fix the existence of ‘positive and negative externalities’, such as pollution. While such market failures exist—and need fixing—in this research stream, we study whether a broader concept is needed to guide more ambitious policies, similar to those that led to the creation of the welfare state and the mission to put a man on the moon.
Key to the problem, is that economists and social scientists have struggled to determine the value of goods produced by government. In macroeconomics, GDP continues to calculate value merely in terms of the cost of inputs, which is both inaccurate and inadequate. In microeconomics, the production function does not embody value created by government, only by labour, capital and technology.
This understanding of public value has spilled over into public management theory. In particular, New Public Management (NPM) and its various descendants view government activities only through the lens of efficiency. This leads to management and evaluation practices that are framed by concerns about government and market failures. These practices leave no room for risk and experimentation, new engagement practices and alternative evaluation frameworks. In this way, narrowly understood public goods and value concepts hamper public organisations and fail to inspire the best talents to work for government.
Following J. K. Galbraith’s path-breaking work on public purpose, IIPP aims to refocus economic and public management attention on the idea of public value. We will work in partnership with scholars and practitioners from a range of disciplines, including economics, economic history, public administration, sociology, political science, philosophy. We aim to create a new framework for public policy grounded in concepts of public value and public purpose—and the implications of such value creation for production and growth.
Our work will involve research, the development of new concepts and learning, and the generation of insights into how we might build capacity within the public sector to adapt to new ways of working, influenced by these ideas.
In providing new metrics for the definition and creation of public value, this stream will be cross-cutting across IIPP’s other research streams.
Watch The Public Economy, Public Goods and Public Value, June Sekera, UCL IIPP Seminar, 12 December 2017
Mazzucato, Mariana (2017), Wealth Creation and The Entrepreneurial State, in National Wealth What is Missing, Why it Matters, Edited by Kirk Hamilton and Cameron Hepburn, Oxford University Press.
Mazzucato, Mariana (forthcoming; 2018) The Value of Everything, Allen Lane, Penguin Books.
Sekera, June (2014) “Re-thinking the Definition of ‘Public Goods’”, Real World Economics Review, July 9, 2014.
Sekera, June (2016) The Public Economy in Crisis; A Call for a New Public Economics; Springer.
The Public Economy Project, Global Development and Environment Institute, Tufts University.