Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book develops a theoretical framework around the notions of 'market failure', 'government failure', private interest theories of government regulation, and welfare economics, and uses it to analyse the regulatory activity of governments in Australia. Economics is the study of how people make choices about the allocation of resources in the face of unlimited wants and scarce resources. The book aims at applying conventional economic theory to the way governments' affect how these choices are made and the impact that this intervention has. It helps the readers to get a better appreciation of the economic costs of government intervention and understand that government intervention, however well intentioned, often does more harm than good.