Government Failures
Collective choice exercised through government structures offers the possibility for correcting the perceived deficiencies of individual choice.
However, government intervention sometimes fails to promote social values in desired and predictable ways as individual choice does.
Public policy should be informed not only by an understanding of market failure but of government failure as well.
Definition: Government failures arise when government has created inefficiencies because it should not have intervened in the first place or when it could have solved a given problem or set of problems more efficiently (Winston, 2006, p. 2~3).
Types of government failures:
Problems inherent in direct democracy (直接民主的問題)
Problems inherent in representative government (代議政府的問題)
Problems inherent in bureaucratic supply (官僚供給的問題)
Problems inherent in decentralization (分權化的問題)
The paradox of voting (投票弔詭) : A social choice may not be the result of aggregating individual choices.
Example: A school board holds referenda to determine the size of the budget for its schools. It proposes to base the budget on the results of pairwise voting among three possible budget alternatives:
Low: No frills
Medium: Similar to other public schools in the region
High: Best of everything
A company (永揚環保事業有限公司) applied for a legal approval for using a forest conservation area in Tainan city to dispose of refuse and other waste.
Environmental impact assessment (環境影響評估) was required to ensure that this project will not generate environmental pollution exceeding the tolerated maximums suggested by scientists before officially approving to proceed with the project.
The EIA mainly consists of two stages (see the next slide for details):
In the first stage, EIA committee members review the application and make a decision about whether the project may have significant impact on environment. If not, the application passed the environmental impact assessment. If yes, then go
However, government intervention sometimes fails to promote social values in desired and predictable ways as individual choice does.
Public policy should be informed not only by an understanding of market failure but of government failure as well.
Definition: Government failures arise when government has created inefficiencies because it should not have intervened in the first place or when it could have solved a given problem or set of problems more efficiently (Winston, 2006, p. 2~3).
Types of government failures:
Problems inherent in direct democracy (直接民主的問題)
Problems inherent in representative government (代議政府的問題)
Problems inherent in bureaucratic supply (官僚供給的問題)
Problems inherent in decentralization (分權化的問題)
The paradox of voting (投票弔詭) : A social choice may not be the result of aggregating individual choices.
Example: A school board holds referenda to determine the size of the budget for its schools. It proposes to base the budget on the results of pairwise voting among three possible budget alternatives:
Low: No frills
Medium: Similar to other public schools in the region
High: Best of everything
A company (永揚環保事業有限公司) applied for a legal approval for using a forest conservation area in Tainan city to dispose of refuse and other waste.
Environmental impact assessment (環境影響評估) was required to ensure that this project will not generate environmental pollution exceeding the tolerated maximums suggested by scientists before officially approving to proceed with the project.
The EIA mainly consists of two stages (see the next slide for details):
In the first stage, EIA committee members review the application and make a decision about whether the project may have significant impact on environment. If not, the application passed the environmental impact assessment. If yes, then go