How advances in technology keep reducing interventionist policy rationales

• Changes in technology that challenge theoretical support for interventions are examined.
• Examples of market driven innovation correcting market failures are provided.
• Many innovations serve to solve problems regulators lack the local knowledge to address effectively.

Rationales for government interventions in the market are typically based on theories of market failure set within a framework of fixed private-sector practices and technologies. However, continuous technological progress and entrepreneurial innovation are eroding the theoretical foundations of these policies, making them increasingly obsolete. This paper describes the four pillars of market failure doctrine and provides examples of how the market is using technology to solve problems previously considered to necessitate government intervention.