Język Polski
English
Published
:
2011-08-30
Economic Policy Tools Addressing Income Distribution in Society
Radosław Jeż
Abstract
The paper seeks to describe the role of the state within the societal income distribution mechanism. The discussion covers the theoretical aspects of unequal income distribution in national economies. 20th century economics was not able to propose an appropriate model of state and government. Welfare economics highlighted the deficiencies of the market that accounted for the failure to achieve Pareto optimal resource allocation. Economic inefficiencies made state intervention appear necessary, even though state-controlled resource allocation was initially perceived as nothing but an inferior alternative to market-driven allocation. As time went by, however, the argument for a greater role of the state grew stronger and was particularly reinforced by Keynesism, which advocated government intervention at the macro-economic level. Keynesian theory called for full employment and for concentrating effort on stabilizing the economy as a whole. Yet that belief in the power of state institutions stemmed chiefly from the observation of market mechanisms whose explanation was unsupported by convincing theoretical and empirical evidence. The debate on the economic role of the state encompasses disputes over the structure of Poland's economy, whose form has been evolving since the outset of the political transformation process. The existing laws and regulations determine the social outcomes of individual activity and delineate the institutional framework for the state's economic domain. Institutions are founded primarily by the state, which thus uses the available instruments to influence potential outcomes of business activity. Therefore, in countries such as Poland governments are expected to pursue a socially acceptable and well-balanced income distribution policy, including basic social assurances and guided by normative considerations as well as by commitment to efficiency. The role of the state should be limited to the protection of the common good while making efforts to reduce excessive disproportions in income distribution, i.e. aiming at "distributive efficiency".(original abstract)Keywords:
Economic policy, Income distribution, Economic policy instruments, Financial markets, Full employmentDetails
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Jeż, R. (2011). Economic Policy Tools Addressing Income Distribution in Society. Zeszyty Naukowe Wyższej Szkoły Bankowej W Poznaniu, 35. Retrieved from https://journals.wsb.poznan.pl/index.php/znwsb/article/view/1442