Green Elephant

Government Solutions for a Common Good Economy

Written by

greenele

in

Here’s a government-focused reframing of Mariana Mazzucato’s talk — turning her core arguments into practical policy solutions and action points for government. I’ve grouped them into solution themes that policymakers could actually act on.

1. Replace GDP Growth as the Primary Goal with Mission-Led Outcomes

Problem

Governments obsess over GDP growth while neglecting whether growth improves people’s lives, reduces inequality, or protects ecosystems.

Government action

  • Adopt national missions with measurable outcomes, e.g.:
    • End child food poverty
    • Achieve affordable net-zero energy
    • Restore biodiversity
    • Reduce regional inequality
  • Budget departments against mission outcomes rather than silo targets.
  • Use dashboards beyond GDP (wellbeing, emissions, health, resilience).

Relevant frameworks:

  • United Nations Sustainable Development Goals
  • Doughnut economics
  • Wellbeing economy models

2. Make All Public Money Conditional

Problem

Governments hand out subsidies, bailouts, tax breaks and procurement contracts with few conditions.

Government action

Require public value conditions for every major financial intervention.

Conditions may include:

  • Profit reinvestment requirements
  • Worker pay and conditions
  • Supply-chain emissions reduction
  • Limits on share buybacks
  • Knowledge sharing / licensing

Examples:

  • No unconditional airline bailouts
  • No subsidies for firms extracting profits without reinvestment
  • No procurement without public value commitments

Principle:
No public money without public return.

3. Reform Procurement into a Strategic Tool

Problem

Public procurement is treated as admin rather than economic transformation.

Procurement often equals 15–20% of GDP.

Government action

Use procurement to shape markets.

Examples:

  • School meal contracts requiring:
    • healthy food
    • local sourcing
    • low-carbon farming
  • Construction contracts requiring:
    • low-carbon cement
    • recycled materials
    • apprenticeships

Government should buy to create better markets.

4. Shift from Market-Fixing to Market-Shaping

Problem

Government acts only after market failure.

This creates:

  • pollution
  • monopolies
  • inequality
  • privatised gains / socialised losses

Government action

Design markets proactively.

Examples:

  • Regulate water companies around ecological outcomes
  • Structure housing finance around affordability
  • Design energy markets around resilience and decarbonisation

Principle:
Markets are not natural forces — they are governed systems.

5. Rebuild State Capability

Problem

Civil services have been hollowed out by outsourcing and consultant dependence.

Symptoms:

  • weak strategic capability
  • poor contract negotiation
  • inability to challenge corporations

Government action

Invest in state capacity.

Needed:

  • elite public-sector training
  • better economic literacy
  • stronger technical teams
  • reduced dependence on consultancies such as McKinsey & Company and Deloitte

Create:

  • mission delivery units
  • public innovation labs
  • government experimentation teams

Government must become a capable co-creator, not merely regulator.

6. Create Government Innovation Labs

Problem

Civil servants are punished for experimentation.

Risk aversion kills innovation.

Government action

Create protected “Gov Labs” for experimentation.

Functions:

  • prototype policy
  • run trials
  • learn from failure
  • share evidence across departments

Inspired by:

  • DARPA
  • NESTA

Principle:
Allow safe failure in pursuit of large public missions.

7. Increase Private Sector Investment

Problem

Low business investment weakens productivity and growth.

UK underinvests heavily.

Government action

Reward productive investment, penalise extraction.

Policies:

  • discourage excessive dividends
  • tax or restrict share buybacks
  • incentivise long-term capital expenditure
  • support productive sectors with conditions

Encourage:

  • manufacturing
  • energy systems
  • circular economy
  • resilient infrastructure

8. Democratise Economic Decision-Making

Problem

People affected by policy rarely help design it.

This creates:

  • bad policy
  • low trust
  • public alienation

Government action

Embed co-design.

Include:

  • workers
  • carers
  • communities
  • indigenous groups
  • citizens’ assemblies

Mechanisms:

  • deliberative forums
  • local councils
  • participatory budgeting

Principle:
Design policy with people, not for people.

9. Strengthen Labour Power

Problem

Weak labour bargaining drives inequality.

Government action

Increase labour voice.

Possible reforms:

  • worker representation on boards
  • cooperative ownership
  • stronger unions
  • profit-sharing schemes

Examples:

  • employee ownership
  • co-operatives
  • mutual enterprises

This improves “predistribution” (fairness before redistribution).

10. Reform Intellectual Property for Public Benefit

Problem

Publicly funded research is often privatised.

Taxpayers fund innovation; monopolies capture profits.

Government action

Attach conditions to public R&D funding.

Requirements:

  • open licensing
  • patent pools
  • fair pricing
  • global access

Especially important in:

  • pharmaceuticals
  • AI
  • green technology

Knowledge generated with public money should deliver public value.

11. Build Community Infrastructure

Problem

Social fragmentation reduces trust and civic capacity.

Government action

Invest in shared public spaces.

Examples:

  • libraries
  • youth centres
  • public pools
  • community hubs
  • parks

These spaces enable:

  • trust
  • civic participation
  • democratic dialogue

Social infrastructure is economic infrastructure.

12. Increase Transparency and Accountability

Problem

Opaque contracting enables corruption and rent extraction.

Government action

Mandate transparency.

Require public reporting on:

  • subsidy recipients
  • contract performance
  • executive pay
  • public return on investment

Build public dashboards.

If citizens cannot see flows of money, accountability collapses.

The Five-Part Government Compass

Mazzucato’s framework can be simplified into a policy test:

Before approving any major policy, government asks:

1. Direction

What public mission does this serve?

2. Participation

Who helped design it?

3. Knowledge

How is learning shared?

4. Rewards

Who captures value?

5. Accountability

How is success measured?

Core Reframe

The central shift is this:

Old government mindset

  • Fix market failures
  • Minimise intervention
  • Be business-friendly

New government mindset

  • Shape markets
  • Build public value
  • Partner with business conditionally
  • Pursue common-good outcomes

In one sentence:

Government should stop acting like a passive referee and start acting like an intelligent architect of markets serving people and planet.

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