Well-meaning dictator

from Wikipedia, the free encyclopedia

In economics, a well-meaning dictator is the theoretical model of a state which , in the case of a planned economy or in the case of market failure, leads to a Pareto optimum and to maximum benefit for economic operators. The model serves (just like the model of Homo oeconomicus ) exclusively for the abstraction and explanation of elementary economic relationships. A concrete economic, social or state order is not described with this model. For the theory that a dictatorship contributes better to economic development than a market economy , see Development Dictatorship .

Definition and meaning

The well-meaning dictator describes a (fictional) leader who pursues the goal of maximizing the benefits of economic subjects without any self-interest . He is independent of all political influences (representing particular interests), has omnipotence and benevolence and is therefore referred to as a well-meaning dictator. He only acts rationally and has (complete) information, including complete information on the preferences of all economic operators.


The essence of using the model is market failure theory . In cases of market failure, it makes sense for the state to take corrective action. Would the state pursue non-economic goals, follow the wishes of interest groups instead of the common good (which should be the normal case in practice) or simply not have the necessary information (where should the state get information about citizens' preferences from?) Would suboptimal effects of the market are replaced by accidental effects of the state. Therefore, ceteris paribus, it is assumed that the state acts as a well-meaning dictator.

New Political Economy

The New Political Economy examines the effects if the state does not behave as a well-meaning dictator.

See also

Individual evidence

  1. Steffen J. Roth: VWL für Einsteiger: An application-oriented introduction , 2nd edition, 2007, ISBN 3825227421 , pp. 133-134