Governance and Government: their interaction in a concrete intervention/participation presented in a citizenship fair.

THE CONCEPT OF

GOVERNANCE GOVERNMENT

Governance refers to the processes and Government, refers specifically to the

GOVERNMENT INTERVENTION

 Government intervention is regulatory action taken by government that seek to change the decisions made by
individuals, groups and organisations about social and economic matters. Government intervention is any action
carried out by the government that affects the market with the objective of changing the free market equilibrium
/ outcome.

BENEFITS OF GOVERNMENT INTERVENTION

 The government plays the role of the referee but insists on not sharing any of the economic risks of the market
players. For the government, the benefit of neutralization is not sharing economic risk, but the cost is the
potential political risk. Intervention means that a government is forced to resolve transaction disputes between
market players, sharing the economic risks directly or indirectly and relinquishing the role of the referee. The
benefit of government intervention is the possibility of reducing potential political risk, and the cost is that such a
government needs to mobilize public or private resources to share the corresponding economic risks.

GOVERNMENT INTERVENTION: PROS & CONS

In between, with the government intervening in areas where the market fails to provide a desirable outcome.
Main areas of government intervention include:
 Provide public goods (e.g. national defense) from general taxation
 Provide basic health care and education standards.
 Environmental regulation and protection.
 Limit the power of monopolies.
 Regulation on worker rights.
REASONS FOR GOVERNMENT INTERVENTION

1. Equality
2. Public goods
3. Education
4. Shift consumer behaviour
5. Environment
6. Monopoly power
7. Strategic planning on infrastructure
 Equality - In a free market, there is likely to be significant inequality and poverty. This is not due to a
meritocracy, but it could be due to unfair advantages of circumstances (inherited wealth, superior
education). Governments can intervene to provide a basic security net – unemployment benefit, minimum
income for those who are sick and disabled. This increases net economic welfare and enables individuals to
escape the worst poverty. This government intervention can also prevent social unrest from extremes of
inequality.
 Public goods - Public goods tend not to be provided in a free market because there is no financial incentive
for firms to provide goods that people can enjoy for free. Governments can provide national defence, law and
order and pay for it out of general taxation. Looking after the environment is also a public good, there are an
increasing number of areas, where a government is needed to deal with issues such as forest fires, rising sea
levels and pressure on water supplies.
 Education - Merit goods are under-consumed in free-market because people underestimate the personal
benefits and/or ignore the external benefits. This leads to an underprovision of health care and education.
Government intervention to provide free education can lead to a significant improvement in the quality of
life for people who are educated. There are also many positive externalities to the rest of society. A well-
educated society can improve labour productivity and economic growth.
 SHIFT CONSUMER BEHAVIOUR - The consumption of demerit goods like alcohol, tobacco and opiates can
cause personal costs and significant social costs (e.g. crime). If the government identifies damaging goods,
they can slowly change consumer behaviour – such as using higher tax, advertising campaigns and
behavioural economics, e.g. making cigarettes difficult to buy with unappealing packets. Long-term
government campaigns to reduce smoking have been effective in reducing smoking rates – something that
has helped to increase life-expectancy.
 ENVIRONMENT - The environment is an area with a significant need for government intervention. The free
market ignores external costs of business on the environment. It also fails to consider long-term
considerations. For example, market forces may lead to the burning of fossil fuels, which cause increasing
environmental problems around the world – which will get worse in the future. Given the potential costs to
future generations, there needs to be government action to shift behaviour to renewable energy which
doesn’t cause these environmental costs. It also fails to consider long-term considerations. Also, the
environment involves many issues where private ownership does not apply. If pollution causes a worsening
air quality, then this affects everyone on the planet, but market mechanisms do not provide an opportunity
to deal with the issue. (If someone pollutes your back-garden, you can sue them. But, if air quality
deteriorates, who takes action?
 MONOPOLY POWER - In a free market, firms can gain monopoly power to charge high prices to consumers
and monopsony power to pay lower wages to workers. This increases inequality and deadweight welfare
loss. Government intervention to limit mergers and monopoly power can lead to increased economic
welfare.
 STRATEGIC PLANNING ON INFRASTRUCTURE - Another limitation of the free market is to underinvest in
quasi-public goods like roads and railways. This can lead to transport bottlenecks. Governments can plan for
future transport trends and invest in the roads and railways which are needed for the future.
DISADVANTAGES OF GOVERNMENT INTERVENTION

1. Government failure
2. Lack of incentives
3. Political pressure groups
4. Less choice
5. Impact of personal freedom
 GOVERNMENT FAILURE - Government failure is a term to describe how government intervention can
cause its own problems. For example, the government may take decisions for short-term political
consideration which lead to an inefficient outcome. For example, government tariffs to protect domestic
industry spark off a trade war, where the economy contracts.
 LACK OF INCENTIVES - In the free market, individuals have a profit incentive to innovate and cut costs,
but in the public sector, this incentive is not there. Therefore, it can lead to inefficient production. For
example, state-owned industries have frequently been inefficient, overstaffed and produce goods not
demanded by consumers.
 POLITICAL PRESSURE GROUPS - Milton Friedman once quipped ‘There is nothing as permanent as a
temporary government bailout.’ He was referring to farming subsidies. Introduced in the 1930s during
the Great Depression to alleviate a farming recession. So After the Second World War, no government
dared to remove subsidies because farmers were a powerful pressure group who wanted to keep the
subsidies.
 LESS CHOICE - Often government intervention in the economy (e.g. nationalisation of industries) has been
associated with less choice. Government produced services have a monopoly. Command economies,
often had very little choice as government decided what to produce. Choice is an important element of
economic freedom and being able to maximise individual welfare. (Not all government intervention leads
to less choice.
 IMPACT OF PERSONAL FREEDOM - An increasing aspect of government intervention is through efforts to
shift consumer behaviour – e.g. reduce congestion, improve health through reducing smoking rates and a
healthier lifestyle. This includes taxes, behavioural influences and regulations. Sometimes people can feel
this is overbearing on their individual choice.

CITIZENSHIP PARTICIPATION - ‘Citizen participation’ refers to citizen involvement in public decision making. In different
interpretations, ‘citizens’ may be either individuals or organized communities, and ‘participation’ may involve either
observation or power. The phrase ‘citizen participation’ came into use to denote remedial efforts to involve inactive
citizens or clients in government activity, but it can include autonomous citizen activities in the larger society, such as
locality or community development, social planning, and social action. So basically When we say Citizenship Participation
in the government it is particularly focused on the Rights and responsibilities that citizenship entails. so what are those
rights, lahat po tayo may karapatang mabuhay, magkaroon ng kalayaan, at karapatan na magkaroon ng ariarian. Tayo din
po ay may karapatan sa isang malinaw at walang kinikilingan na sistema ng hustisya o batas na kung saan ang
pagkakamali ay natutuguan at ang hustisya ay ibinibigay ng patas mabilis at pantay. Karapatan po nating lahat na
tratuhin nang pantay pantay sa harap ng batas ano man ang katayuan o estado natin sa buhay. So kapag sinabi naman
pong Responsibilities. Responsilidad o obligasyon natin na maging tapat sa gobyerno, responsibilidad din natin na
magbayad ng taxes or rates, responsibilidad di natin na sumunod sa kung ano man ang nakasaad sa batas,
Responsibilidad din natin bilang mamamayan ang bumoto o maghalal ng mamumuno sa ating bansa, Responsibilidad din
natin na galangin ang national anthem ng pilipinas at galangin ang mga namumuno sa ating bansa.
In a concrete intervention or participation presented at a citizenship fair, governance and government may interact in a
number of ways. For example, a government agency may be responsible for organizing the fair and providing information
to attendees about various government programs and services. At the same time, the fair may provide an opportunity for
members of the community to engage in governance by participating in discussions and decision-making processes
related to their community. In this way, a citizenship fair can be seen as a form of participatory governance, in which
members of the community have the opportunity to actively engage in shaping the decisions that affect their lives. This
can help to promote greater accountability and transparency in government, and can also provide a space for citizens to
voice their concerns and ideas. So we gather some interview to know the feelings of the citizens when it comes to
participative governance

Play the interview

Overall, the interaction between governance and government in a citizenship fair can be seen as a way of strengthening
the relationship between the two, and of promoting a more active and engaged form of citizenship.