The familiar market-failure model remains quite useful for issues of price efficiency and traditional utilitarianism, but it has many shortcomings as a standard for public-value aspects of public policy and management. In a public-value-failure model, I present criteria for diagnosing values problems that are not easily addressed by market-failure models. Public-value failure occurs when: (1) mechanisms for values articulation and aggregation have broken down; (2) "imperfect monopolies" occur; (3) benefit hoarding occurs; (4) there is a scarcity of providers of public value; (5) a short time horizon threatens public value; (6) a focus on substitutability of assets threatens conservation of public resources; and (7) market transactions threaten fundamental human subsistence. After providing examples for diagnosis of public-values failure, including an extended example concerning the market for human organs, I introduce a "public-failure grid" to facilitate values choices in policy and public management.If one fails to wear a motorcycle helmet and sustains head trauma as a result, there is a major externality. In many societies, the cost of medical treaatment is not borne only by the injured individual, and thus, pme's failure to wear a motorcycle helmet puts the rest of society at risk of having to pay for the individual's indiscretion. Not only does society take the burden of avoidable health costs, it also provides payments to survivors and loses the productive value of an individual whose life is shortened (usually young males, a demographic group who generally have high work productivity value).
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