Analysing and Evaluating Government Intervention in Markets

This study note provides an overview of the different forms of government intervention in markets

Summary - evaluating government intervention in markets

• How significant is the market failure? (consequences)
• Can the market / price mechanism find some solutions?
• What are the likely consequences of not intervening?
• How effective is an intervention? (i.e. consider alternatives)
• Who are the winners / losers from an intervention?
• Consider the potential for one or more government failures
• Which works best – market-based or regulatory (“command and control”) approaches?
• What impact might behavioural interventions have?