1.4.2 Government Failure

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  • Created by: 13clarken
  • Created on: 22-04-19 15:20
... is when ...intervention causes an even more inefficient use of resources than previously achieved in the free market
Government failure
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... is a problem because It interferes in the market process, Politicians have their own agenda and it Can create moral hazards
Government failure
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Factors that cause government failure: Distortion of ... : Distorting the proper functions of markets which lead to inefficiencies in the economy. Attempts to reduce income and wealth inequalities can worsen incentives and productivity
Price Signals
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Factors that cause government failure: Unintended ... : The law of unintended ... is that actions of consumers, producers and the government always have affects that are unanticipated or unintended. An examples is the Endangered species act
Consequences
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Factors that cause government failure: Excessive ... costs: It can be costly to administer and enforce
Administration
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Factors that cause government intervention: The government has a lack of available ... when it comes to making decisions, which can lead to short and long term consequences
Information Gaps
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... is when there is a formation of bias because two groups get to know each other well- which can reduce the strictness. E.g. the government may not punish polluters as much as they should do
Regulatory capture
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... is when under pressure governments create solutions, which create more problems, similar to unintended consequences
Short Termism
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Other cards in this set

Card 2

Front

... is a problem because It interferes in the market process, Politicians have their own agenda and it Can create moral hazards

Back

Government failure

Card 3

Front

Factors that cause government failure: Distortion of ... : Distorting the proper functions of markets which lead to inefficiencies in the economy. Attempts to reduce income and wealth inequalities can worsen incentives and productivity

Back

Preview of the front of card 3

Card 4

Front

Factors that cause government failure: Unintended ... : The law of unintended ... is that actions of consumers, producers and the government always have affects that are unanticipated or unintended. An examples is the Endangered species act

Back

Preview of the front of card 4

Card 5

Front

Factors that cause government failure: Excessive ... costs: It can be costly to administer and enforce

Back

Preview of the front of card 5
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