ABSTRACT
The recent literature on political economy shows a broad area of ‘government failure’ in the efficient use of natural resources. The implications of such government failure could be as damaging to the economy as those of ‘market failure’. Such failures comprise:
1 intervention in markets and present wrong price signals which distort allocation (Agarwala 1983); 2 marketing controls; 3 land use controls; 4 inappropriate fiscal policies (e.g. taxes and subsidies); 5 the general failure of bureaucracies to formulate and implement rational national resource policies in
LDCs.
