Definition Of Government Failure
Economics notes
Definition Of Government Failure
➡️ Government failure occurs when government intervention in the market fails to achieve its intended outcome. This can be due to a variety of factors, such as misallocation of resources, lack of information, or unintended consequences.
➡️ Government failure can lead to market distortions, such as price ceilings and floors, which can lead to inefficient outcomes. It can also lead to a misallocation of resources, as the government may not be able to accurately assess the needs of the market.
➡️ Government failure can also lead to a lack of competition, as the government may be able to use its power to create a monopoly or oligopoly. This can lead to higher prices and lower quality of goods and services.
What is the definition of government failure?
Government failure is a situation in which government intervention in the economy fails to achieve its intended outcome, and instead produces an inefficient allocation of resources. It can occur when government policies are not well-designed, when they are implemented ineffectively, or when the government fails to take into account the unintended consequences of its actions.