Government Failure.

Definition of Government Failure:  This occurs when govt intervention to overcome market failure fails. Also govt intervention may make things worse this can occur for the following reasons.

 

Reasons for Government Failure

• Poor Information, politicians may have poor information about the type of service to provide.
• Political interference e.g. politicians may take the short term view rather than considering long term effects
• Admin cost of govt bureaucracy in running public services
• Lack Of incentives: There is no profit motive working in the public sector this can lead to inefficiency .For example there could be overstaffing

However (evaluation) public services are not subject to the same profit goals. It is difficult to give a profit motive in health or education.

 

 

Essays and Revision Notes on Government Failure

• Government Failure
• Privatisation of Public Services
• Should We Pay for NHS?
• Rationing and the NHS
• Why Government Intervention ?
• Market Failure
• Buffer Stocks

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