Pigouvianska

Pigouvianska is a term used to describe the doctrine and policy approach derived from the work of economist Arthur Cecil Pigou. It focuses on addressing externalities—costs or benefits of a transaction that affect others outside the market—by aligning private incentives with social efficiency. In this tradition, government intervention is justified when the market fails to price these external costs or benefits.

The core instruments are Pigouvian taxes and Pigouvian subsidies. A Pigouvian tax places a price on the negative externality, aiming to reduce the associated activity to a socially optimal level; a Pigouvian subsidy rewards the production or consumption of positive externalities. Implementations include carbon taxes, pollution charges, congestion pricing, and subsidies for research, vaccination, or clean technologies.

Applications: environmental policy is a primary arena; but the approach also informs public health, education, and urban planning. The Pigouvianska framework contrasts with other explanations of policy failures such as the Coase theorem, which emphasizes bargaining under property rights, or public choice critiques.

Critiques: measuring external costs accurately can be difficult; taxes may distort behavior or be unfair in distribution; subsidies can lead to overcompensation; governance and administrative costs; dynamic externalities and innovation responses may not be captured.