Government Intervention.

Here are some examples to practise your chains of analysis and evaluation skills with regards to government policy and market failure.  Do not forget that intervention can result in government failure.

  • subsidies e.g. the bio-fuel debate or subsidies for industries affected by globalisation
  •  indirect taxes e.g. environmental taxes or taxes designed to curb demand for / consumption of de-merit goods
  • the introduction of competition into a market e.g. postal market liberalisation
  • an increase in government spending on public goods and merit goods such as flood defence schemes, free entry to museums and galleries
  • different strategies designed to reduce income and wealth inequality e.g. the national minimum wage or a rise in the top rate of income tax
  • the introduction of carbon trading as a way of reducing CO2 emissions
  • different policies designed to reduce unemployment e.g. comparing the effectiveness of investment in training with an employment subsidy for the long term unemployed
  • major infrastructural projects such as new motorways, London 2012
  • a decision to relax planning controls on new house-building

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