government failure

Question 1

government failure

Answer 1

where government intervention creates inefficiency and leads to a misallocation of scarce resources.

Question 2

causes of government failure

political self interest

Answer 2

many legislations can be rushed and cost benefit analysis can be neglected

Question 3

causes of government failure

policy myopia

Answer 3

where politicians look for short-term solutions to difficult economic problems rather than long-term considerations

this can lead to inefficiencies in the economy

Question 4

causes of government failure

regulatory capture

Answer 4

this is when Industries are under control by regulatory bodies
somebody’s gonna work in favour of produce the rather than consumers and prevent the ability of the market or operate freely

Question 5

causes of government failure

government intervention and evasion

Answer 5

raise in taxes of demerit goods can increase attempted tax voidance smuggling and development of Grey markets

Question 6

causes of government failure

imperfect information

Answer 6

this can result in misguided policies and damaging long-term consequences as there is no proper cost benefit analysis