Demands for government intervention occur in areas other than the regulation of monopoly which we investigated in Module 3. With the development of industry and modern means of transport, problems of pollution of air and water, waste disposal, congestion, and noise have arisen. Further, the technical sophistication of processes and products has led to uncertainties about the consequences for safety and health of various activities. People cannot hope to be fully informed about the attributes of all the products they consume or the safety of the environment in which they work. Governments and regulatory agencies have therefore gradually accumulated wide-ranging powers and responsibilities in these areas.
The aims of this module are:
To set out briefly the main features of environmental and safety regulations in the UK.
To explain how external costs arise and what actions may be taken by those affected by such costs.
To consider the various policy instruments which governments might use to influence business decisions, and to discuss how they are likely to affect the various interest groups.
To investigate the information and monitoring problems which accompany the process of regulation and which influence the bargaining framework.
