PolSci175_Common_Pool_Resource

PolSci175_Common_Pool_Resource - PS 175 Common Pool 07:02...

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Unformatted text preview: PS 175 Common Pool 07:02 Under What Circumstances do People Turn to Government Intervention? • Seeking Public or collective goods • Externalities • Natural Monopolies • Information rationales • Moral imperatives Public or Collective Goods • Benefits to an entire society, which are no excludable • One person’s use cannot prevent another person’s • Production of public goods faces a free rider problem • So the gov’t intervenes to assure production Externalities: Costs or Benefits to Outsiders • Private decision makers seek their own goals o Costs or benefits falling on others can be ignored o Negative externalities are the most common justification for gov’t intervention Somebody has to step in to deal with it because some firms may choose to clean up and lose money, where as others continue to pollute to increase profits Justification for gov’t intervention Some industries have Natural Monopolies • If monopolies exist in essential commodities or services, the owners of the monopolies can charge unfairly high prices Public Need for Information • Markets work most efficiently when information is readily available to all • Gov’t regulations requiring disclosure of information improve efficiency Moral Imperatives • Alaskan Caribou, Canadian Harp Seal Under What circumstances do people turn to government intervention? • The list above offers 5 reasons WHY people may want gov’t intervention • They do not explain what it takes to get intervention or whether it works if adopted Problem: Overgrazing Damage? • Cattle eat selectively o They eat the tasty plants first o This changes the ecosystem • Cattle drink huge amounts of water o This harms competing species • Cattle compact the soil o 700-1000 pounds destroy riparian areas around creeks and lakes...
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This note was uploaded on 08/25/2011 for the course POL SCI 175 taught by Professor Staff during the Fall '10 term at UCSB.

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PolSci175_Common_Pool_Resource - PS 175 Common Pool 07:02...

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