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The term came into use in the second half of the 20th century following the synthesis of Neoclassical Microeconomics and Keynesian Macroeconomics associated with economists such as John Hicks , and the development of theories of Market Failure which allowed for a range of views on the desirability or otherwise of government intervention.

Although the neoclassical viewpoint remains dominant, the development of theories of Asymmetric Information and the increasing importance of Game Theory have provided a countervailing influence to the general neoclassical presumption in favour of Laissez-faire .