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 (??????? ) Problems inherent in representative government (??????? ) Problems inherent in bureaucratic supply (??????? ) Problems inherent in decentralization (?????? ) The paradox of voting (???? ) : 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 (?????????? ) applied for a legal approval for using a forest conservation area in Tainan city to dispose of refuse and other waste. Environmental impact assessment (?????? ) 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 to the second stage. The assessment process in the first stage is not open to the public. In the second stage, a series of investigations will be conducted to determine whether the underlying project meets required environmental criteria. After the passage of EIA, the company must get an official permission to establish devices, present a proposal of soil and water conservation and obtain an operating license before the landfill system starts to function.