Government and Small Business
7 important questions on Government and Small Business
The existence of a market failure does not justify government action. There are other alternatives. The limitations in government action are
- Lack of information
- Lack of business skills
- Difficulty in admitting mistakes are made
- Conflicting targets
- Difficulty in providing help that adds to total net ouput.
A Niche for government action:
- No generalized market failures
- Stabilize the economy
- Improve the regulatory regime
- Specific support should be channeled through B2B interfaces
Peacock identified 4 more weaknesses of government action
- Aims are vertroebeld by keeping everybody happy.
- policies are slow.
- Cost & Benefits are rarely assessed.
- No real costs for policy makers themselves, when things go wrong.
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Methods of government support
- Finance
- Provide information
- Help with training & personal development
- Provide specialist advice
There are three ways in which government can help SE
- Aims
- Methods
- Targeting
The means of targeting policy is to target those businesses which either
- Will benefit the greatest from assistance.
- Will yield the greatest policy benefits.
- Avoid displacement.
Benefits of targeting policy
- reduce range of expenditure
- focus resources where they are needed
- easier to market
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The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding
