This is a revision presentation on government failure
Governments intervene in markets to maximise the social welfare of the community and to correct market failures. Their hope is that interventions improve equity and economic efficiency.
But what if policy is ineffective or creates deeper market failures in its wake? In any evaluation question on market intervention, please remember to make reference to the possibility of government failure.
We cover lots of possible examples in this section; supporters of free markets and a limited state are naturally inclined to find government failure wherever they look. Others see the government as an empowering and enabling actor in markets that are not working optimally.
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