uestions of equity and social justice determined the nature and the extent of government intervention. This point was expanded upon by Groenewegen (1990,2) who argued that the extent of market intervention in the supply, distribution and redistibution of goods and services are not dictated by purly political and ideological considerations, other considerations may play a role including the failure of the market in certain instances to ensure efficient, equiable allocation of resources.Another reason why governments intervened in the market place was to ensure the provision of public goods. Public goods are generally comodities that are socially desiralbe but cannot be financed through the private sector. The reason for this is that,A public good is a comodity or service whose benefits are not depleted by an additional user and for which it is generally difficult or impossible to exclude people from its benefits, even if they are unwilling to pay for them. (Baumol, 1988,639) Baumol's definition of a public good highlighted two distinct properties, excludibility and depletability, however, there are very few goods that are totally non-excludable or totally non-depletable. Groenewegen (1990,2) argued that a distinction needed to be made between the public provision and the public production of goods, if government intervention in the economy is to be understood. Goods may be produced in the public sector and sold in the market place, while privately produced goods may be provided by the public sector. Groenewegen argued that why some goods were supplied by the private sector and others by the public sector was a complex issue whose anwser was not soley determined by political imperitives. One of the primary reasons for government intervention was the absence of the perfect market for many socially important groups.If there is a potential for the market to fail governments will attempt to intervene. The type and the extent o...
