Concluding Remarks
Given the variety of possible impacts on theoretical development, the shadow of specific institutional traditions is only one among several factors contributing to the late homogenization and internationalization of public economics.
Some of the reasons for the persistence of “national” specificities were the result of differences in the theoretical architecture (for example, social/public wants according to the German tradition versus externalities according to the Marshallian tradition). Others include (1) a broad understanding of the role and function of the state according to its historical tasks in the era under consideration (for example, mere administration versus national development versus nation building) and (2) basic issues in political philosophy and method.The diversity of foundational influences suggests that some knowledge of the history of public economics would be beneficial for the further development of contemporary research programs, as it enhances the awareness of unexploited combinatorial opportunities. The twentieth-century history of public economics was a process in which predominantly Anglo-Saxon public economics absorbed continental influences in a specific way. This process has been conditioned by historically specific developments within and beyond the profession. It also has been influenced by historical circumstances of the twentieth century, such as a wave of emigration of economists with Jewish, liberal, and left-wing political backgrounds from Europe to the USA.
Analysis of particular episodes within the emergence of modern public economics together with the broader panorama facilitates re-thinking the role of basic concepts in new combinations. For instance, work related to the conceptual history of merit wants may put recent discussions on “nudges” and “libertarian paternalism” (triggered by the boom in behavioural economics) into a more general perspective.
Public economics is not, at least not only, an applied subfield of economics. As it is employing economic methods all over the place, it is neither a discipline of its own nor simply an inter- or trans-disciplinary subject. It is economics interacting with other disciplines studying the interfaces of two sub-systems: the private market economy and the public sphere. Despite the fact that public economics studies the public economy, that is, the economic side of the public sphere, positive analysis of the public sphere needs to go beyond pure economics. Normative public economics will rely on principles that are not derivable from models of pure economics. This is the background against which some distinguishing features in the history of public economics are understandable: the first and foremost of those properties is that progress in public economics is to an extraordinary degree combinatorial and conceptual. The second aspect is the important role of national traditions linked to historically specific forms of statehood. Not least for those specific reasons, it should come as no surprise that the Whig concept of progress applies only in a carefully qualified sense to public economics.
Richard Sturn