Government failure can never be worse than the market failure it attempts to correct.

Question

Quizplus · Accepted Answer

While government intervention may be necessary to correct market failures, government failure can result in even larger problems than the original market failure. This is because government actions can be influenced by political considerations, bureaucratic inefficiencies, and regulatory capture by special interest groups. As a result, government policies may have unintended consequences and lead to distortions in the market, resulting in decreased efficiency and welfare.

Government Failure Can Never Be Worse Than the Market Failure