What Are the Similarities Between Market Failure and Government Failure?

Market failure and government failure are economic terms often involved in economic ethics research. "Market Failure" was first used by American economist Barto in 1956. According to the concept of market almighty, market failure points out that the market mechanism has inherent defects, which are mainly manifested in the following aspects: the market mechanism itself cannot eliminate monopolies, and thus cannot guarantee the completeness and thoroughness of competition; it cannot achieve stable and balanced economic growth Although the market mechanism can eventually bring the economy to equilibrium, the time lag is long and the cost is high (such as the cyclical economic crisis). It cannot meet the social demand for public goods; it cannot resolve the contradiction of the income distribution gap, which is completely Distribution in accordance with the principles of the market mechanism (the ownership of property is consistent with the right to income) will cause the income gap between members of society to be too large, which will cause social instability. "Government failure" was first proposed by the Public Choice School headed by Buchanan in the 1970s. "Government failure" aimed at exaggerating the government's pre-emptive role, pointing out that government intervention in the economy also has unavoidable shortcomings, mainly in two aspects: first, the state's excessive intervention in the economy. That is, the scope and intensity of state intervention have exceeded the reasonable need to make up for market failures and maintain the normal operation of the market mechanism. As a result, they have hindered the normal functioning of the market (e.g., the proportion of the state-owned economy is too large, the level of social welfare is too high, and unreasonable regulations Distortion caused by the system, etc. Secondly, the state's insufficient intervention in the economy, that is, the scope and intensity of the state's intervention cannot meet the reasonable needs to make up for market failures and maintain the normal operation of the market mechanism. As a result, the function of the market mechanism cannot be exerted (such as lack of protection). Fair competition laws and regulations, insufficient investment in infrastructure and high-tech industries, neglecting environmental protection, etc. ^[1]