[7] Lindbeck has done research on unemployment (e.g. the insider-outsider theory of employment), the welfare state (including the effect of changing social norms and its interaction with economic incentives[8]), and China's reformed economy.
It was on the basis of this viewpoint that he promoted the economic theories of conservative American theorist James McGill Buchanan.
He jointly worked with Mårten Palme and Mats Persson to study how local variation occurs in regards to sick leave.
In 1992–1993 he headed the so-called "Lindbeck Commission", which was appointed by the Government of Sweden to propose reforms in light of the then-ongoing economic crisis.
This later resulted in one of his most famous quotes: “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”[14] which appeared in the book The Political Economy of the New Left: An Outsider's View (1971), written in reaction to the developments he had observed on American campuses during a sabbatical in the US.