ABSTRACT
Introduction We ended our discussion on markets with a section on how they might fail and then government might need to intervene in order to deal with this failure. So government might need to regulate and apportion costs as a result of externalities, or it might need to intervene with subsidies to speed up the production of dwellings. So we might say that government action is necessary because of market failure. But this is to see the role of government as being entirely reactive, and only having a role when, and if, markets fail.
