What do we mean by government failure? This revision video looks at lots of topical examples of where well-intentioned intervention in markets can often result in deeper problems being created.

Government failure occurs when an intervention leads to a deeper market failure or even worse a new failure may arise
In other words – government failure is when intervention leads to an even bigger deadweight loss and allocative inefficiency, than the free market outcome.
Another definition – when government intervention causes a more inefficient allocation of goods and resources than would occur without that intervention
Policies may have damaging long-term consequences for the economy or society
Policies may prove to be inequitable – i.e. cause an increase in inequality of income and wealth

#aqaeconomics #ibeconomics #edexceleconomics

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