1. How do market failures provide rationales (reasoning) for collective interference with
individual choices (public policy)?
Market failure is the uneconomical dispersal of goods and services. Goods and services should
be determined by supply and demand; however, when these services don’t match, it leads to
market failure. Market failure is commonly the reason for collective interference, and both
market failure and collective interference frequently leads to new public policies. According to
Wieinburge (2017), historically, the United States has engaged in “price, entry, and exit
regulations of competitive markets” (Winburge, 2017). Collective interference happens when
there appears to be a flawed marker, and the result is that taxes and new rules or policies can fix
the blemishes. This is true in the case of a truly free market, in which that case, the government
may feel the need to intervene.
Market failure refers to the inefficient distribution of goods and services in the free market. In a
typical free market, the prices of goods and services are determined by the forces of supply and
demand, and any change in one of the forces results in a price change and a corresponding
change in the other force. The changes lead to a price equilibrium.
2. How do government failures provide rationale and justification for public policy?
Government failure happens when there are no efforts to intervene and correct the market failure
(Happanen, 2014). Another form of government failure as defined by Happenen, is “where
government intervention leads to less efficient allocations than those that existed before the
intervention” (Happanen, 2014). Government policy failure is directly correlated to government
failure. Governmental failure provides reasoning for public policy because it has the ability to
mitigate the negative effect of not only governmental failure but market failure as well.
that communitarian conceptions of leadership can be incorporated into conventional economic
approaches, and that this can have significant implications for public policy formulation.
What is Fiscal Policy?
Fiscal policy refers to the budgetary policy of the government, which involves the government
controlling its level of spending and tax rates within the economy. The government uses these
two tools to influence the economy. It is the sister strategy to monetary policy. Although both
fiscal policy and monetary policy are related to government revenues and expenditures and both
seek to correct situations of excess or deficient demand in the economy, they do so in very
different ways.
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Government failure, in the context of public economics, is an economic inefficiency caused by a
government intervention, if the inefficiency would not exist in a true free market.[1] The costs of
the government intervention are greater than the benefits provided. It can be viewed in contrast
to a market failure, which is an economic inefficiency that results from the free market itself, and
can potentially be corrected through government regulation. However, Government failure often
arises from an attempt to solve market failure. The idea of government failure is associated with
the policy argument that, even if particular markets may not meet the standard conditions of
perfect competition required to ensure social optimality, government intervention may make
matters worse rather than better.
As with a market failure, government failure is not a failure to bring a particular or favoured
solution into existence but is rather a problem that prevents an efficient outcome. The problem to
be solved does not need to be market failure; governments may act to create inefficiencies even
when an efficient market solution is possible.
Government failure (by definition) does not occur when government action creates winners and
losers, making some people better off and others worse off than they would be without
governmental regulation. It occurs only when governmental action creates an inefficient
outcome, where efficiency would otherwise exist. A defining feature of government failure is
where it would be possible for everyone to be better off (Pareto improvement) under a different
regulatory environment.
Examples of government failure include regulatory capture and regulatory arbitrage.
Government failure may arise because of unanticipated consequences of a government
intervention, or because an inefficient outcome is more politically feasible than a Pareto
improvement to it. Government failure can be on both the demand side and the supply side.
Demand-side failures include preference-revelation problems and the illogic of voting and
collective behavior. Supply-side failures largely result from principal–agent problem.[2]
Government failure may arise in any of three ways the government can involve in an area of
social and economic activity: provision, taxation or subsidy and regulation.[3]
3. What are the foundational rationales that justify collective interference in your policy
issue area of interest?
The COVID-19 pandemic has highlighted the tensions within the federal-state and local
relationship within the United States (Williamson, 2020). When the nation’s leadership refuses to
lead the lower governmental levels of leadership, the challenges will affect the citizens. State
governors also lacked direction in making decisions to lock down their states. Their decisions
ultimately were built on approaches centered around evidence from public health experts and
from the guidance of public policy decisions that were made throughout history (Kettl, 2020).
However, these public policy decisions lacked foundational rationale because the policies of
federalism weren’t clearly defined. Collective interference is justifiable to encourage the
foundation of the rationales where public policy limitations are present.
Federalism – collective inference
4. Describe the basic steps to policy analysis. Evaluate the similarities and differences
between the research design process and the policy analysis process.
There are six components of policy analysis that should be followed. They include: (1) verifying,
defining, and detailing the problem, (2), establishing evaluation criteria, (3) identifying
alternatives, (4) evaluating the alternatives, (5) displaying and distinguishing among alternative
policies, and (6) monitoring and evaluating the implemented policies. Similar to the research
design process, which requires researchers to create a research question, policy analysis also
requires stating the problem by focusing on the central question and determining the magnitude
and extent of the problem. The steps for policy analysis are a lot more detailed as it works to
establish evaluation criteria by determining policy goals and how they will be measured. Similar
to research design, policy analysis steps also look into the methods that are being used and
ensure the methods are appropriate for the research. Both styles are very similar and focus on the
production of information.
1. Verify, define and detail the problem
2. Establish evaluation criteria
3. Identify alternative
4. Evaluate alternative policies
5. Display and distinguish among alternative policies
6. Monitor and evaluate the implemented policy
They include:
1. creating research questions,
2. devising a theory,
3. obtaining constructive data, and
4. using the data to support one’s research.
According to
5. Describe how an outcomes matrix can help assess policy solutions. Provide an example of
how the outcome matrix has been used in a current, real-world policy issue.
The outcome matrix may assist with the policy solutions by helping to transition from the
problem to the solution, which will allow the analyst to refrain from ending with an
“overdeveloped description of the status quo and an underdeveloped analysis of alternative
policies” (Weimer, 2017).
Policy Analysis
What process is the actually best
Interestingly, Harris and Carman did not address systems or channels in their discussion of
market failures, referring only to the dichotomy of buyers and sellers. Systems were certainly
present in the 1980’s but appear to have been less prominent in the academic literature at that
time.
Subsequent developments in information technology and the growing involvement of financing
have made systems more thoroughly embedded and complex (Economist 2016).
As systems are voluntary associations, it is reasonable to assume that they are beneficial for the
participants, or are at least a better alternative than other arrangements. This leaves open the
question as to whether systems are beneficial for the rest of us. In other words, are systems
beneficial to consumers individually and to society collectively?
The following assesses six specific categories of market failure: imperfect competition, entry
barriers, externalities, imperfect information, and inequality. Transaction costs are the final type
of market failure, and are directly pertinent to the organization of the system itself.
From a critical standpoint, it appears that systems can contribute to failure. It is true that using a
failures framework necessarily draws attention to negative aspects of system performance.
What is a Marketing System? A marketing system is a set of procedures that initiate and nurture
customer relationships to maximize lifetime value and generate business. It's a step-by-step
routine that creates a repeatable process that can be measured and tracked, helping your team
stay accountable to objectives.
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