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Government Failure: Congestion, Pollution and the Pensions Crisis - Lesson Plan: 2 x 1 hour lessons

A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal with Government Failure and are relevant to the following specifications:

  • AQA: Module 1, 10.5, 10.6. Module 5, 14.5
  • Edexcel: Unit 2
  • OCR: Unit 2882, 5.2.2, 5.3.3

Aim

The purpose of these lessons is to encourage students to think beyond any initial ideas that they may have been exposed to that market failure can be satisfactorily corrected by governments. To this end, the lessons will combine an understanding of market failure, methods of correcting government failure and the source of imperfections in government decision-making with respect to resource allocation.

Students are presented with three topical problems - congestion, pollution and the pensions crisis. First, they are asked to consider where the market failure occurs; second, to think of solutions to the problem. The suggestion that the decision-making process might suffer from various problems that will make the outcome less efficient is introduced through the concepts of rent seeking and log-rolling. Problems of measuring the effects of government intervention are then introduced, finishing off with a short report on one of the issues identified. This last task might allow educators to plan their lessons in different ways. Some may choose to have the report as a written task for formal assessment; others might choose to get students to feed back the outcome of their report in the form of a group presentation. This can further stimulate whole class discussion of the issues raised by a more detailed look at each topic.

The emphasis right the way through the activity is on encouraging candidates to think through the problems for themselves. To achieve this, the atmosphere must be relaxed and non-threatening to allow students to feel comfortable about making mistakes in the direction of their thinking. The hope is that students will try to put themselves in the position of the government and to think about where problems could arise, how they would measure effects and so on. Given the students' lack of experience in such matters, focusing on these issues might be challenging, but the intention is that they see the need to be able to think through such issues. After all, those charged with actually making these decisions do not know everything, which is exactly why they get things wrong and why government failure occurs!

Learning Objectives:

At the end of the lessons, students should be able to:

  • Give accurate and clear definitions of the terms 'government failure', 'rent seeking', and 'log rolling'
  • Show an understanding of the reasons why market failure can occur
  • Show awareness on how governments can step in to solve such problems
  • Show an understanding of the problems facing governments in correcting market failures
  • Show an ability to think through problems and solutions in a logical and coherent manner; to be confident of making mistakes in such a process and learning from such mistakes

Resources:

Lesson Structure:

Lesson 1

  1. Begin lesson by asking students to review their understanding of the market mechanism and allocation of scarce resources. (10 minutes)
  2. Review the concepts of public goods, merit goods and externalities. (10 minutes)
  3. Short question and answer session on ways in which governments have sought to correct market failures - aim to generate a discussion of such methods using appropriate examples. The opportunity exists here for students to review their previous learning by being invited to explain, using appropriate diagrams, the methods being discussed. (15 minutes)
  4. Introduce the PowerPoint Presentation - use the slides to emphasise the issues already discussed and to introduce new concepts (i.e. public choice theory) to students. Try to get students to think of examples where such issues may occur throughout the Presentation. (20 minutes)
  5. Review key learning outcomes of the lesson. (5 minutes)

Lesson 2

  1. Review main points from the first lesson. (5 minutes)
  2. Explain the Activity tasks to students. Give brief background of the issues for each scenario presented. Explain the importance of the thinking process and the fact that any thoughts will be valuable - the aim is to identify the problems/issues, etc that arise. (10 minutes)
  3. Set students on the tasks - this can be done in small groups or individually depending on how the student outcomes are to be used.

(The remaining timing will depend on how the educator chooses to use the material developed by the students. The rest of the lesson can be allocated to the task with a further lesson being used, if appropriate, for student feedback and discussion of the issues arising.)

Extension Task:

For further work on market/government failure see the following: