Evaluation of Government Policies
Market Failure: Externalities and Common Pool Resources
AO3
Syllabus requirement
Strengths and limitations of various interventions: measurement difficulties, stakeholder impacts, degree of effectiveness.
Assessment objectives
AO3 Synthesis and Evaluation
Summary
This topic evaluates government policies for correcting externalities and managing common pool resources, focusing on practical challenges such as measurement, effectiveness, time lags, enforcement and distributional consequences for stakeholders. It explains why policy outcomes can be uncertain, how multiple interacting factors affect results, and how different stakeholders (large firms, small firms, low-income households, local communities) can be affected unequally by interventions.
