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Why Growth Theory Requires a Theory of the State Beyond Market Failures

2,510 views · Published 16 October 2013 · 1:03:09 · Indexed 22 October 2026

Channel: LSE · 2013 · Education

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Speaker(s): Professor Mariana Mazzucato 
Chair: Professor Danny Quah

Recorded on 8 October 2013 in Hong Kong Theatre, Clement House.

Government spending has a higher multiplier when that spending is 'directed' towards large missions. Whether this was putting 'a man on the moon' in the past, or tackling 'climate change' in the future, such missions require a strong intervention by government, beyond the usual justification tied to 'public goods' and 'externalities' (fixing market failures). The talk will consider the implications of mission oriented investments for understanding the role of the state in the economy, how to develop symbiotic (not parasitic) public-private partnerships, and how to judge the performance of state intervention beyond the crowding out-crowding framework.

Mariana Mazzucato is an economist, and holds the RM Phillips Chair in Science and Technology Policy at the University of Sussex (SPRU). Her work focuses on the relationship between financial markets, innovation and economic growth, and is currently funded by the Institute for New Economic Thinking (INET), the Ford Foundation and the European Commission. Her book The Entrepreneurial State: debunking private vs. public sector myths has been called 'heretical' by Forbes.

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