Democracies and Public Policy

Public Policy in Democracies

This saying, attributed to Thomas Jefferson, represents a certain philosophy. Explain.

According to Volokh (2017), this phrase, often attributed to Thomas Jefferson emanated, is commonly associated with Henry Thoreau in his work of 1849 that focused on Civil disobedience. In other instances, the philosophy is attributed to the thoughts of John Locke despite it lacking in their writings. The premise was founded on the significance of abolishing governments for minimal control of the people and businesses. The fundamental function should be protecting the citizens' rights and maintaining social order. Volokh notes that the ideology of governing least introduces the concept of democracy. More governance results in violence and conflicts. He explains that this philosophy means that no single government or individual can be entrusted with all the powers to control the interests of the public. Instead, the power must be limited to minimize cases of abuse, especially when those bestowed with power are unjust or selfish. Governments should have limited control of citizens' private interests. Thus, the philosophical phrase describes the nature of control the government should have towards the people and resources.

What are the main reasons for government intervention?

According to Lane (1983), Government intervention involves participation in the marketplace by influencing market democracy to achieve specific objectives. Government intervention is essential for the following reasons. It enhances the welfare of the people. This involves protecting the public from any harm from the free market. Secondly, government intervention stimulates economic growth. This involves establishing economic infrastructures that revitalize existing economic structures and encourage more participation in economic activities. Third, government intervention corrects market failure. Here, it responds to market challenges that discourage trade or favor undesirable economic effects. Government intervention is also associated with minimizing the information gap. Here, the government acts as an agent of giving the citizen correct information about the status of the market or the existing products (Ross, 2021). Besides, government intervention reduces demerit goods and increases merit goods to enhance the citizens' social welfare. These reasons aim to ensure public demand for products is addressed while protecting the citizens against externalities linked to negative impacts on the economy and social welfare.

Which ideology(ies) stand(s) behind each of these reasons? Elaborate and explain the connection, using examples to illustrate.

Each of the reasons for intervention is anchored on some ideologies. Demerit goods are reduced by increasing taxes which affects their supply. For instance, products like alcohol and tobacco could be dominating the market and have negative impacts on the health of citizens. However, with government intervention, the flow of such products in the market can be reduced, resulting in improved welfare of the society. An increase in merit goods can occur through subsidizing, increasing interest in society, and stimulating economic growth. Merit economic products include items like education and health, whose increase in the economy enhances society's well-being. When there is market failure, the government will intervene to correct the market status. Market failure can take different forms, such as excessive production of demerit products or where goods and services are distributed inefficiently. To counter this effect, the government can intervene through regulations to influence how different products are accessed in the market. The other reason is to reduce the information gap. Here, the government informs the people about the products, reducing exploitation cases emanating from companies. For instance, companies can conceal important information that makes consumers make wrong decisions about a product. However, when the government intervenes, it reveals the information to the population, making it easier to make informed choices. Consequently, there is a shift in market dynamics (Lane, 1983).

List at least two specific market failures. Explain the reasons why they require - or lead to - government intervention. How may the government deal with each one of them?

One form of market failure manifests itself in allocation and production inefficiencies. This form of market failure occurs when the resources in the economy are not optimally distributed. In such a market, powerful cartels enjoy monopolistic power and create an environment that discourages the entry of new players. Consequently, there is an increase in negative externalities that affect the nature of the entire market. Besides, such a market limits social welfare in the accessibility of public goods ((Cowen, n.d). However, resources in a monopolistic environment can be optimally distributed with government intervention, correcting economic inequality. The government can intervene to protect the citizens from exploitation for public social goods.

According to Ross (2021), market failure is also manifested in various economic participation inequalities. For instance, employment significantly affects income levels, and taxation has a major role in defining people's income. Government can intervene in various ways to implement a proportionate tax based on the income. Besides, in case of unemployment, the government can intervene through job creation, altering labor policies, and running stimulus programs.