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Government Intervention in the Market, image, Regulation in the Irish…
Government Intervention in the Market
Ireland : A mixed economy
Irish Companies Exporting goods
State Agencies: Are unprofitable and expensive to start but are important for citizens and companies.
Employed and Unemployed citizens of the country.
Role of the department of finance: 1. Spending taxpayers money on funding public sector wages and services.
Investing in capital.
3.Fulfilling Social Welfare Obligations.
Government economic aims and objectives
Sustainable Economic Growth
Control Government Finances
Achieve Full Employment
Promote Regional Development
Improve Infrastructure: eg. The Provision of Public Transport
Control Price inflation/stability
Ensure an Equal Distribution of wealth
Maintain State Services
Care for the Environment
Avoid market failure
Governments intervening in the economy
Paying social welfare
By Providing a Subsidy or grant
By collecting taxes: Direct and Indirect
Through Public provision (state companies)
By operating Government Departments directly.
By Redistributing Income
By imposing laws and providing consumer protection
By representing the Irish People at EU Level
By acting during national emergencies
Advantages of Government Intervention
Regulates the development of Monopolies
Provides Employment
Non-Profit Companies
Social Welfare
Education
Public Goods
Foreign Direct Investments
Disadvantages of Government Intervention
State employees are not incentivised by output
Public Sector Workers are protected
Govt. Inefficiency
Government Bureaucracy
Reduces Entrepreneurship and Initiative
Who regulates?
A regulatory body is one that has statutory recognition and has functions in at least three of the following:
Making of Rules, Formulation of Goals and/or the setting of standards
2.Monitoring, gathering information, scrutiny inspection, audit and evaluation.
3.Enforcement, modifying behaviour, applying rewards and sanctions.
Examples are the Road Safety Authority and the Food Safety Authority
Why regulate?
Public Welfare
Working Environment
Market Failures
Provision of Public Goods
Monopoly Power
Professional Conduct
Is regulation effective?
Company Closures
Corrects Market Failure (asymmetric information)
Improved Public Welfare
Consequences of regulation
Increased Costs to Firms
Consumers Pay
Govt. Administration Costs
Regulation is the mechanism by which consumers and their interests can be safeguarded to ensure that fair reliable and sustainable services are delivered.
Regulation in the Irish Economy
