ILO:
a) Understanding of government failure as intervention that results in a net welfare loss
b) Causes of government failure:
o distortion of price signals
o unintended consequences
o excessive administrative costs
o information gaps
c) Government failure in various markets
a) Understanding of government failure as intervention that results in a net welfare loss
b) Causes of government failure:
o distortion of price signals
o unintended consequences
o excessive administrative costs
o information gaps
c) Government failure in various markets
Starter
Why did was there Government intervention in the market for cheese?
What do you think is meant by Government failure in the video?
What do you think is meant by Government failure in the video?
Theory
Watch the theory content before the other videos.
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Government Failure: What is government failure?
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Y1/IB 27) Government Failure
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Government Failure
Government failure exists when the government intervenes to correct a market failure, but the result is a more inefficient allocation of resources and there is a net welfare loss.
Examples:
Examples:
Articles:
Plastic packaging ban 'could harm environment'
Plastic packaging ban 'could harm environment'
Cambridge Asda baskets swiped as 5p bags phased out
Supermarket giant Asda said it has been forced to order dozens of new baskets because of a shortage at a store - caused by customers taking them home. The baskets went missing at the store in Cambridge after the company began phasing out 5p plastic bags. The store only has 30 to 40 left for its customers. An Asda spokesman said the firm asked "that the small number of customers who are taking our baskets home with them use their bags for life instead". A new load of 100 plastic green baskets to replace those that have gone missing is set to arrive at the store at the Beehive Centre next week.
https://www.bbc.co.uk/news/uk-england-cambridgeshire-45433997
Supermarket giant Asda said it has been forced to order dozens of new baskets because of a shortage at a store - caused by customers taking them home. The baskets went missing at the store in Cambridge after the company began phasing out 5p plastic bags. The store only has 30 to 40 left for its customers. An Asda spokesman said the firm asked "that the small number of customers who are taking our baskets home with them use their bags for life instead". A new load of 100 plastic green baskets to replace those that have gone missing is set to arrive at the store at the Beehive Centre next week.
https://www.bbc.co.uk/news/uk-england-cambridgeshire-45433997
Causes
Why would Hayek suggest Government failure occurs?
How could the following two videos be related to Government failure?
How could the following two videos be related to Government failure?
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Rent Control - Analysis and Evaluation Points
Other examples:
NHS prescription
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Drugs Laws: Should Britain Legalise Drugs?
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Assessment question
Evaluate the best way for the Government to tackle CO2 emissions? (25 marks)
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Norway and CO2 emissions | DW Documentary
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Evaluating Policies to Cut Carbon Emissions
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