Describe five major sources of government failure

Question

Please provide the best answer for the statement.

Answer 1

One reason for this type of failure is a principal–agent problem with representative democracy whereby the interests of the voters (principals) are not aligned with the interests of the elected representatives (agents), which can lead to rules or legislation that benefit the particular interests of government officials rather than voters. A second reason for the failure is that the benefits from a government program or project are often clear to citizens or groups, but the costs are frequently hidden. A third reason for inefficiencies in government is that voters or elected representatives have to accept political choices that are limited and bundled, which means government legislation forces voters or elected representatives to take the bad programs with the good programs. A fourth reason is that the incentives for economic efficiency tend to be stronger in the private sector because there is a profit incentive, but there is not a similar incentive in the public sector. As a result, there tends to be more government bureaucracy and less efficient use of scarce resources. A fifth reason is that there can be political corruption when elected or appointed government official abuse their powers and misdirect government resources for personal gain.