conflicts 1

7/31/2019 Conflicts 1

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Conflicts in Government

Policy Objectives


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Policy Objectives

Economic Objectives:

Unemployment/Employment

Inflation

Economic Growth

Balance of Payments


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Policy Objectives

Non-economic Objectives: Poverty

Health

Education Pensions

Equity

Crime

Social care

Welfare

Productivity

Efficiency


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Conflicts in Government Policy Objectives


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Government now accounts for nearly40% of all economic activity

Governments have a wide rangeof economic and non-economicpolicy objectives

Many of these will involve conflicts cannot have everything!

Necessity of finding acceptable balances


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Inflation v Growth:

Economic growth may be desirable to

help improve the wealth and welfareof the population at large

But:

Too much economic growthmay lead to inflation


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Aid versus Trade:

Should the government push for policies to

improve trade with less developed countriesor provide more aid?

But:

Aid may lead to the country

becoming too reliant Trade may need international cooperation


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Employment versus Inflation:

Policies to boost employment

may be seen as desirable

But:

Could trigger economic growth that is

too fast leads to inflation?


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Trade versus Protection:

Boosting trade may help UK

exporters but also implies accessfor imports

But:

Domestic industries may be pushingfor some form of protectionfrom cheap overseas imports


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Interest Rates versus Growth:

Government might want to stimulate

economic growth by seeinga reduction in interest rates

But:

Lowering interest rates may triggerinflationary pressures


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International Aid versus DomesticPriorities:

There may be an imperative toincrease aid abroad to combatpoverty, starvation, etc.

But:

There are plenty of domesticpressures homelessness, poverty,etc.


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Economic Growth versusSustainability:

Economic growth may be

desirable to help improve thewealth and welfare of all

But:

Economic growth has effects

on the environment and onsocial issues stress, divorcerates, etc.

Encouraging the development of wind farmsmay benefit the environment but people wholive nearby may feel the farms are aneyesore.

Title: Wind Farm. Copyright: iStock.com


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Domestic Governmentversus the EU:

Governments may

wish to integrate theeconomy with the EUand take advantageof the single market

But:

This may takeimportant policymaking powers awayfrom the UK

The expansion of the European Union and the

new constitution may offer opportunities tobusinesses but at what cost to the legislativepowers of domestic governments?

Copyright: Stock.Xchng


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Regulation versus Market forces:

Governments might see a need to regulate

business and the economyto achieve various social, economicand political objectives

But:

Greater regulation restricts the functioningof the market possibly leading tothe inefficient allocation of resources


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Public Sector Spending versus Tax Cuts:

There may be a demand for improved publicsector services health education, etc.

But:

Governments might also want to pursue taxcuts not only politically popular but also

helps stimulate the economy and givespeople more freedom of choice


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Solutions:

Finding a balance between the

conflicting objectives (not easy)

Establishing priorities andjustifying them - accepting

the criticism of these priorities

conflicts 1

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