PRINCETON, New Jersey (Reuters) - Societies should not rely on market forces to protect the environment or provide quality health care for all citizens, a winner of the 2007 Nobel Prize for economics said on Monday.

Professor Eric Maskin, one of three American economists to receive the award, said that he “to some extent” takes issue with free-market orthodoxy championed by U.S President George W. Bush and some other western leaders.

“The market doesn’t work very well when it comes to public goods,” said Maskin, a slight, soft-spoken 57-year-old who lives in a house once occupied by Albert Einstein.

Maskin, together with Leonid Hurwicz of the University of Minnesota, and Roger Myerson of the University of Chicago, received the prize for their pioneering work on mechanism design theory which examines whether trading mechanisms are the best ways of allocating resources.

In its statement with the award, the Royal Swedish Academy of Sciences said the market’s efficiency may be undermined because consumers are not perfectly informed, competition is not completely free, and “privately desirable production and consumption may generate social costs and benefits.”

“Markets work well with goods that economists call private goods” like cars or other consumer durables, Maskin said in his office at the Institute for Advanced Study in Princeton, New Jersey.

“If I buy a car, I use the car, you don’t and the market for cars works pretty well. But there are many other sorts of goods, often very important goods, which are not provided well through the market. Often, these go under the heading of public goods,” he said.

“How do we ensure in the case of public goods that they are provided at all, and that they are provided at the right level, taking into account citizens’ preferences?” he said.

A clean environment, for example, is not a private good in that “my enjoyment of it doesn’t preclude yours,” he said.

“So the theory of mechanism design asks what sort of procedures or mechanisms or institutions could be put in place which allow us to choose the right level,” he said.

Those mechanisms could include taxes to allow the more efficient provision of public goods, he said.