Policies should address market failures from "summary" of The Industrial Policy Revolution II by J. Esteban,J. Stiglitz,Justin Lin Yifu
Policies play a crucial role in the functioning of markets. They are instrumental in correcting market failures, which can occur for various reasons. Market failures can be caused by externalities, imperfect competition, information asymmetries, and other factors that distort the efficient allocation of resources. When markets fail to allocate resources efficiently, there is a role for government intervention to correct these failures and improve economic outcomes. Policies aimed at addressing market failures are designed to ensure that resources are allocated efficiently and that the benefits of economic activity are maximized. By targeting specific areas where markets are not functioning properly, such as in the provision of public goods or in the regulation of monopolies, government policies can help to correct these inefficiencies and promote overall economic welfare. One way in which policies can addres...
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