Government aims to spread distortions by...
tackling market failures as a whole
However tackling more than one policy at once means that...
The gov. uses second best policies which cause distortions
Types of intervention
financial, regulation, public production, income transfers
sources of government failure
bureaucratic power, corruption, electoral pressures, incompetence, poor info, principle/agent problem, lobbying
Aims for horizontal equity
minimum standards, equality of access, equality of opportunity