Thesis on "Market Failure and Public Policy"
Thesis 4 pages (1334 words) Sources: 5 Style: APA
[EXCERPT] . . . .
Market Failure and Public PolicyThe potential of market failure is a phenomenon that is commonly considered in a free market economy. When a market fails, it is the task of economists and policy makers to find the reasons for such failures, while the government is expected to intervene in a manner that is targeted towards mitigating the effects of market failure. Theorists appear to disagree somewhat regarding the exact way in which such intervention should take place, but it is commonly conceded that the government should have some role in mitigating market failure.
Market Failure and Public Policy
According to Janusz Mrozek (1999, p. 411), markets fail because of a violation of efficiency. The author holds that all market transactions can be classified according to an efficiency rule: it is either efficient or inefficient. The efficiency rule determines the extent to which marginal benefits to society equal or exceed marginal costs. This efficiency is often influenced by private-decision rules. When the efficiency rule is then violated, the government can improve the efficiency of the economy by altering individual markets. Mrozek emphasizes that the efficiency rule should be applied by considering a unified view of markets and how they operate, with an all-inclusive consideration of the various elements involved. In this way, the most efficient solution can be found to mitigate market failure.
Zerbe and McCurdy (1999, p. 561) refer to efficiency as market transactions that are optimal in operating price; they are costless. Failure to achieve costless transactions, or transactions at less than cost, means that market failure oc
download full paper ⤓
According to Zerbe and McCurdy (1999, p. 561), a degree of market failure is inevitable when concluding a transaction. However, some market failures are significant and require government attention.
The Role of Government
According to Mrozek (1999, p. 412), governments have more issues than only efficiency to consider in terms of potential market failure and policy issues. Furthermore, the government will only view market alterations as desirable in terms of efficiency when private decision rules are improved in the process. There are therefore certain constraints upon the ability of governments in making an intervention effort in terms of market failure. These constraints can for example include: political constraints; bureaucratic constraints such as limited information; and distortions that arise from taxation viewed as necessary to support policy issues. The government is therefore not always able to intervene in market failure issues.
The government's role in market failure is generally seen as one in which unique power or coercion is applied to overcome cost barriers. When the government is therefore able to intervene, it can regulate prices in such a way to mitigate the causes of market failure.
When the government does intervene, externality problems need to be the point of focus. Governments can for example correct such problems by means of changing private marginal benefits or costs (Mrozek, 1999, p. 416). Private decision rules are then modified I this way to match the efficiency rule. These private decision rules can include mandates, taxes, subsidies, and tradable permits. It is also possible that certain institutions, such as property rights backed by a legal system, can internalize externalities. In such cases, governments can provide these with features like torts and liability in order… READ MORE
Quoted Instructions for "Market Failure and Public Policy" Assignment:
I need a paper written on the following subject...
Discuss the concept of Market Failure and Its Implications for Public Policy. What are the Issues that result in Government Failure and How can these issues be addressed to ensure effective government intervention?
i will be sending three sources via e-mail. Thanks for your help. *****
How to Reference "Market Failure and Public Policy" Thesis in a Bibliography
“Market Failure and Public Policy.” A1-TermPaper.com, 2008, https://www.a1-termpaper.com/topics/essay/market-failure-public-policy/5448. Accessed 5 Oct 2024.
Related Thesis Papers:
Public Policy Tourism Public Policy Orientation Essay
Public Policy Tourism
Public Policy Orientation and Tourism in Costa Rica
Just 20 years ago, Costa Rica scarcely registered in a discussion on global tourism. A small republic most noted… read more
Essay 10 pages (2941 words) Sources: 10 Style: Harvard Topic: Latin America / Mexico / Caribbean
Market Failure the OECD Essay
Market Failure
The OECD defines market failure as a situation in which "market outcomes are not Pareto efficient." There are a number of causes of market failure, and some of… read more
Essay 2 pages (564 words) Sources: 1 Topic: Economics / Finance / Banking
Market Failure Term Paper
Market Failure
Running Page: GOVERNMENT REGULATION, BOON OR BANE?
Weimer and Vining (2004) perceive a perfectly competitive economy as the rational setting for public policy. Public policy is the creation… read more
Term Paper 10 pages (2840 words) Sources: 4 Style: APA Topic: Economics / Finance / Banking
Public Policy Dealing With Minimum Wage Term Paper
Public Policy Dealing With Minimum Wage
Introduction minimum wage refers to the lowest hourly, daily or monthly wage that employers may legally pay to their employees or workers. The first… read more
Term Paper 8 pages (2826 words) Sources: 5 Style: MLA Topic: Career / Labor / Human Resources
Public Policy Making and the Policy Making Process Term Paper
Public Policy-Making Process
PUBLIC POLICY MAKING and the POLICY-MAKING PROCESS
Public policy-making or the policy-making process that occurs in governmental organizations is a complex process that involves many organizations and… read more
Term Paper 9 pages (2427 words) Sources: 1+ Topic: Government / Politics
Sat, Oct 5, 2024
If you don't see the paper you need, we will write it for you!
We can write a new, 100% unique paper!