Capella University Government and Budget Process Discussion

Discussion post: In an evaluation, discuss how the role and function of budgeting has been utilized to correct externalities and other market failures. Additionally, justify the use of taxpayer resources to correct externalities and other market failures

Thread Outline: Use bolded statements as headings in your thread.

I. Summarize the role of the government in the budget process

II. Analyze the role of the government in correcting externalities and other market failures

III. Justify the use of taxpayer resources to correct externalities and other market failures

Externalities are a consequence of a governmental activity that affect other parties without this being reflected in the cost of the goods or services involved. Externalities by nature often are environmental. Some examples of negative externalities include:

Air pollution

Water pollution

Farm animal production

Passive smoking.

Traffic congestion

Noise pollution

Market failure is an inefficient allocation of resources. Government failure occurs when government intervention results in a more inefficient and wasteful allocation of resources.