Sep
27

Government Failure

Government action is touted as a solution to “market failures” like imposing a tax on polluters to make them aware of the costs they impose on those who inhale their fumes. But, the cure (government intervention) may be worse than the ailment (the market failure). This is because there is also “government failure.” So, before suggesting government intervention, reflect on the notion that government may worsen rather than improve private sector outcomes.

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