Libertarian (private sector, free-market) and non-libertarian (public sector, government intervention/regulation/oversight) policy proposals tend to have different types of failure modes. Here are some things to consider before implementing a proposal of each type. Additions and other feedback are as always more than welcome.
Checklist when considering a government-intervention approach:
- Is the free market insufficient?
- Is the intervention sufficient?
- Is the inherent moral cost of infringing on individual liberty justified?
- Is the economic cost justified?
- What is the opportunity cost of the money being spent?
- What market distortions (inefficiencies) will this create?
- How will this be misused?
- What moral hazards does this present for ordinary people?
- What opportunities are there for intentional abuse by members of the public?
- What moral hazards does this present for the officials implementing and enforcing it?
- What opportunities are there for intentional abuse by officials?
- What precedents does this set for future legislation?
- What opportunities does this present for regulatory capture?
- How can ordinary people circumvent these regulations/interventions?
- How can wealthy individuals and corporations circumvent these regulations/interventions?
- How harmful is this if it turns out you’re the baddies?
Checklist when considering a free-market approach:
- What negative externalities exist?
- What moral hazards exist?
- Does this enable abusive monopolization (as in company towns)?
- Does this enable/encourage artificially creating inelastic demand (as in hard drugs)?
- What related regulations exist that might tend to distort the proposed market?
- Is this an isolated demand for free enterprise that disproportionately benefits companies receiving monopolies, subsidies, or other advantages from the government?