This chapter asserts that governance paradigms are institutional reactions to the core challenges that public authorities encounter when delivering public welfare services. These paradigms are shaped by national histories and contexts, necessitating an in-depth understanding of their development and institutionalization. Thus, a typology of three models of public governance is introduced, each uniquely addressing the central challenge of providing public welfare. Public welfare provision hinges on the issue of understanding citizens’ needs. Economic theory highlights the need for state intervention to distribute welfare services equitably and to address market failures including public goods, economies of scale, externalities, merit goods, and information asymmetries. However, this leads to the difficulty of aligning services with citizens’ demands, potentially causing inefficient provision levels due to information imperfection, a key cause of government failure. The chapter suggests that public management reforms since the 1980s have been attempts to overcome the preference revelation problem by combining three distinct institutional paradigms: the market, the forum, and the commons.