Social Welfare, Public Health Policy and the Theory of Merit Goods

This paper reviews the prevailing debate about the theory of merit (and demerit) goods, which marks its fiftieth anniversary in 2009. It suggests an interdisciplinary approach to address its basic dilemmas, and underscores the efficacy of popular participation by using illustrations derived from the field of public health. The healthcare field was also chosen to provide a policy context to examine the developmental and regulatory roles of modern government. The study finds that collaborative social science research on the normative and axiological bases of public policy, and the extent to which they are founded on popular consent, enrich the theory of merit (and demerit) goods. It also allows such a theory to transcend the microeconomic analytical levels of the individual consumer and household.