A level Economics Mind Maps / Government Intervention to provide Merit Goods

Summary — Government Intervention and Merit Goods

AO1 Knowledge & Understanding: Government intervention occurs when markets fail to allocate resources efficiently. Merit goods such as education and healthcare are under-consumed due to information failure—people undervalue their long-term benefits.

AO2 Analysis: Governments step in to ensure provision of essential merit goods because the private sector may not supply them adequately or may charge prices that make them unaffordable. Direct provision, subsidies, and public funding improve access and create wider positive externalities for society and the economy.

AO3 Evaluation: Intervention can fail if the government lacks funds or accurate information about which goods should be provided or at what level. Inefficiency and poor targeting can also reduce effectiveness. Conclusion: Government intervention is justified to correct market failure and promote equity, but success depends on efficient management, adequate resources, and informed policy decisions.