Th1.4: Gov Failure: Unintended Consequences

Question 1

How do unintended consequences come about?

Answer 1

some interventions cause effects which the government did not intend to happen. consumers and producers may react to policies in unexpected ways, meaning the policy doesn’t have it’s intended affect

Question 2

What is an example of an unintended consequence in the UK?

Answer 2

buffer stock scheme CAP - meant to smooth out price fluctuations but led to over production and a fall in agricultural prices elsewhere in the world