In welfare economics, a social planner is a decision-maker who attempts to achieve the best result for all parties involved. In neo-classical welfare economics, this means the maximization of a social welfare function. In modern welfare economics, there is a greater emphasis on Pareto optimality, in which no one's economic status can be improved without worsening someone else's. Pareto-optimal solutions are not unique, and according to the Second Fundamental Theorem of Welfare Economics, a social planner can achieve any Pareto-optimal outcome by an appropriate redistribution of wealth by means of competitive market.
In practice, the social planner role is generally played by a government entity. However, real governments have multiple goals in addition to, or instead of the benefit of their people. This problem is studied in public choice economics.
Famous quotes containing the word social:
“To rescue from oblivion even a fragment of a language which men have used and which is in danger of being lost—that is to say, one of the elements, whether good or bad, which have shaped and complicated civilization—is to extend the scope of social observation and to serve civilization.”
—Victor Hugo (1802–1885)