"As there are many areas of inadequate optimization (departures), and resource limitation and information costs prevent the rectification of all these departures, the pursuit of a more desirable future through either private effective altruism or governmental policies is subset to the challenge of the second-best theory (where the presence of uncorrectable distortions complicates the pursuit of desirable policies elsewhere through interdependence)...Despite the nihilistic implication of the second-best theory on the impossibility of piecemeal welfare policies...the third-best theory shows that the government or effective altruists may increase at least the expected welfare by focusing on areas of serious inadequate optimization, taking into account the indirect effects if information allows."
January 1, 1970