RE: Efficiency and Deadweight Loss
NP - Rabih Abou-Khalil - Sweet Rain
I blogged a while back about the meaning of efficiency and deadweight loss - the answer I more or less came up with (although the definition Im still not exactly sure of) basically is to do with how much money can be made from doing an action as opposed to how much is actually made (in extremely crude terms).
I find this question to be of increasing importance as I study the aim of Structural Adjustment loans made by the IMF and the World Bank, and their effects on the economies of third world countries. The question of efficiency VS equity is no more important than it is here: who benefits from these so-called efficiency raising measures (the fact that they so rarely actually do raise efficiency is relevant as well, but beside the point for now)?
I think the exact definition of efficiency, and what this concept of deadweight loss actually refers to needs to be examined more closely. I will keep this in mind as I continue my reading on the neoliberal policies of the IMF and WB, and their stated goals of greater efficiency via market allocation of resources.
Posted by illogicist at 1:25 PM