A professor of mine in graduate school opened his Public Economics class with a half-joke: "What's the difference between liberal economists and conservative economists? Liberal economists study market failures; conservative economists study government failures." There's a grain of truth in that. In general, I think economists who specialize in market failures tend to overestimate the abilities of government, and economists who specialize in government failures tend to overestimate the abilities of the market. For this reason, I was pleasantly surprised by the remarkable even-handedness of Timothy Besley's recent book on the economics of government, Principled Agents? The Political Economy of Good Government. It's an excellent survey of the literature on the economics of government. It summarizes the current state of the field, including the empirical successes of the different schools of thought (e.g., public choice, welfare economics), and develops a useful model that incorporates the different approaches. If you want a solidly unbiased account of the modern economics of government, then I highly recommend Besley's book.