Arthur Pigou School

The Arthur Pigou School refers to economic theories associated with the British economist Arthur Pigou, particularly his ideas on welfare economics and externalities. Pigou argued that government intervention can improve economic efficiency by addressing externalities—costs or benefits that affect third parties. For instance, pollution harms people who aren't involved in a transaction. Pigou suggested using taxes or subsidies to correct these imbalances, encouraging businesses and individuals to adopt more socially responsible practices. His work laid the groundwork for understanding how policy can promote overall societal welfare while addressing market failures.