Government failure Flashcards
1
Q
define government failure
A
when intervention to correct market failures doesn’t improve the allocation of resources or leads to a worsening of the situation
2
Q
factors
A
imperfect info
unintended consequences
conflicting objectives
administratives cost
regulatory capture
3
Q
define conflicting objectives
A
caused by political self interest can lead to policy myopia
4
Q
define regulatory capture
A
regulatory body acts in interests of the firm rather than the consumer its to protect
