POL 203 Lecture Notes - Lecture 10: Market Failure, International Tropical Timber Organization, Common-Pool Resource
20 Apr 2016
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Document Summary
The voluntary exchange of goods and services where the price is determined by supply and demand. Set of institutions where decisions are made by buyers and sellers. Rules about the market are (generally) created by the state. The question is how to harness the decisions of those participating in the market to advance environmental ends: market failure the market is inefficient when allocating common pool resources. Solution #1: change the nature of the good (may or may not require state intervention) Change the good that is being inefficiently allocated to another type less susceptible to market failure. Example: change a forest from a common pool resource to a privately owned good. Solution #2 voluntary programs (no or limited state intervention required) Self-regulation allow buyers and sellers to make decisions. Requires buyers to make demands role of ngos. Examples: organic food voluntary (public pressure through environmental groups)
