Nicholas Barr

"First, the welfare state is not a subject apart, but fits naturally into the framework of economic analysis. Secondly,the theoretical arguments support the existence of the welfare state not only for well known equity reasons but also - and powerfully - in efficiency terms."

"A 'socialist' country like Sweden has a highly articulated welfare state; Denmark and New Zealand (which are not highly industrialized) were among the first countries with a public system of old-age pensions; and Saskatchewan was the first Canadian province to have publicly organized health insurance."

"A society is a cooperative venture for the mutual advantage of its members."

"A reduction in the liberty of the least well off cannot be justified even if it is to their economic advantage."

"Perfect competition must hold in product and factor markets, and also (and importantly) in capital markets. The assumption has two essential features: economic agents must be price takers; and they must have equal power."

"In a world of certainty, the welfare state has only a small role."

"It is argued that regulators are frequently captured by those whom they are supposed to regulate."

"Markets can be efficient or inefficient; so can governments. thus market failure is a counterpoint to government failure."

"there is an efficiency case for an institutional welfare state."

"By 'trading' (i.e. pooling), individuals can acquire certainty."

"Thus social insurance, in sharp contrast with actuarial insurance, can cover not only risk but also uncertainty."

"Money income is a flawed measure of individual welfare."

"The European Commission uses an explicit relative poverty line of 60 per cent of national average income."

"The crucial point is that any system of health care must constitute a genuine strategy-ad hoc tinkering is a guaranteed road to disaster."

"Education to the extent that it raises an individual's future earnings, increases her future tax payments; in the absence of any subsidy, an individual's investment in education confers a 'dividend' on future taxpayers."

"Efficiency advantages and disadvantages are more finely balanced than with health care - one person's 'sign of a civilized society' is another's 'society is going to the dogs'."

"So far as school education is concerned, many of the assumptions necessary for market efficiency fail, the main problems being imperfect information, imperfect capital markets, and external effects."

"It has been argued that relatively poor people will borrow to buy a house, so why not to buy a degree?"

"Given the external benefits higher education creates, it is efficient that taxpayers subsidies should be a permanent part of the landscape."

"The welfare state is the outcome of diverse forces over nearly four centuries of developing social policy."

"We need a welfare state of some sort for efficiency reasons, and would continue to do so even if all distributional problems were solved."

"Unless the countries of East Asia are very different, rising incomes and the weakening of extended family ties will lead to demands for rising social expenditure."

"It is the welfare state that has made capitalism, with all its attendant benefits of economic growth, politically feasible..."