Positive and negative externalities - Research Paper Example It will also highlight solutions to mitigate these externalities. It will finally analyze the different stakeholders involved in the externalities and their role regarding the externality There are negative externalities related to environmental consequences. An example of a negative externality with environmental consequences is pollution. There are different forms of pollution; air, water and noise. Air pollution has public health implications, and causes damage to buildings and crops. Water pollution has the potential to cause harm to humans, plants and animals. Noise pollution on the other hand might cause disruptions, both mentally and psychologically, to people and animals. Public goods are an example of a positive externality. These are goods whose benefits people cannot be excluded from enjoying. Public goods include clean water, public defense, law enforcement, social amenities and so on. These goods are accessible to most people in the society (Tulkens & Chander, 2006). If businesses start accepting payments online for the services and goods they offer, these actions can lead to a negative externality. This means that clients no longer need to buy paper cheques in order to pay, a situation which means that cheque printing firms will lose revenues. This can also result into unemployment especially for employees charge with the role of processing cheques. In the course of the operation of a company, there are byproducts created. These by products make their way into the environment and cause pollution. Air pollution results from the burning of fossil fuels in industries. Water pollution occurs when industrial wastes are deposited into water sources. Noise pollution occurs in situations where the production process emits destructive sounds that get into the atmosphere. Public goods exist for the satisfaction of the needs of the entire society. These goods exist so that everyone in the society can benefit from them. If such goods did not
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Since the end of the second world war, many East Asian economies have seen a “miraculous†growth. And with so many other nations still in poverty, economists and leaders are turning their eyes towards the “East Asian tigers†to see if they can replicate their results. When looking at the facts it is obvious that the the circumstances facing the East Asian nations were quite different than the ones that nations face today. But outside of these differences a loose model of the East Asian miracle can be utilized in Third World nations today and, considering the high success rate of so many of the East Asian economies, would most likely see positive results.
The secret to success of East Asian economies is the hand that the government has had in industrial affairs. Starting in the 1950s nations like china began taking steps towards centralized government through reform. One example of this would be the Chinese land reform of the 50s under the new Mao Zedong's communist regime (Blecher, 2010:p.27). This land reform took away the oligarchic control of the landlords, changing the feudalistic policy of landlordism over to a more capitalistic form of socialism in which the government has the control. This is clearly a very vital part of the industrialization process as many nations that have failed with the agrarian reform continue to find themselves struggling to get out of poverty. A modern example of this would be Brazil, where the rural landlords have stalled any sort of reform that might dismantle their rule over peasants farmers and tenants (Kay, 2002:p.1076). The institution of land reform was a vital part of industrialization in East Asia, unlike other nations it was introduced before the economies had gotten on their feet and w... ... to ever truly practise total free trade, only even opened its borders in the 19th century (Chang, 2003:23). Despite this, Industrialized nations, with the United States at the forefront, continue to advocate for more 'freedom' in the economies of developing nations, claiming that there is no other way to be free from poverty. By doing this they make themselves out to be hypocrites calling for more market-freedom when in fact nations who practice state intervention, as they did during earlier stages, have seen more economic success. Two great examples would be China and India who both have a high level of state involvement in their respective markets, yet both nations have become the model for developing nations in the 21st century (Chang and Grabel, 2004:13). But for whatever reason the West continues to advocate a policy that they themselves have barely used. |