- Public Provision
National defence, the criminal justice system, public schools, universities,
the highway system, and national parks are all examples of goods or -
services that are provided by governments in Canada. Public provision is
the most obvious remedy for market failure to provide public goods, but it
is also often used in the interest of redistribution and other social goals
(e.g., public education and healthcare services, neither of which are
public goods as defined earlier in the chapter). We will consider public
spending in detail in Chapter 18.
- Redistribution Programs
Taxes and government spending are often used to alter the distribution of
income generated by the free market. Government transfer programs
affect the distribution of income in this way. We examine the distributive
effects of the Canadian tax-and-transfer system in Chapter 18.
- Regulation
Government regulations are public rules that apply to private behaviour.
In Chapter 12 , we saw that governments regulate private markets to
limit the use of monopoly power. In Chapter 17 , we will focus on
regulations designed to deal with environmental degradation. Among
other things, government regulations prohibit minors from consuming
alcohol, require that children attend school, penalize racial discrimination
in housing and labour markets, and require that all cars have seat belts.
Government regulation is used to deal with all of the sources of market