ANALYSIS OF SHORTCOMINGS IN IMPROVING THE COMPETITIVENESS OF THE EDUCATION MARKET

Аннотация

This paper aims to explore the types, origins and clasification of market failure with the help of theories and experimental works of some researchers on externalities and other factors. KEYWORDS:- Market failure, Externalities, Coase Theorem, Allocation of resources, Pegovian tax, Transaction coasts, Shadow economy. Wallis, 2001). At the same time, there are other I NTRODUCTION economists who classify market failure into four features, namely externality, monopoly, public Market failure is an economic problem that leads goods and common property resources (Randall, to inefficient allocation of resources in the 1983). economy or in other words, it refers to incapability of an economy at given prices to Following the objective of the report, this section reach certain intended outcomes in resource use aims to discuss previous research works (Islam, 2019). conducted on the study of market failure by externality. The fundamental understandings of externalities Literature review refer to the studies of Marshall, Pigou and Coase, In fact, there is a strand of literature focused on although they own some inconsistent senses the study of market failure. The studies are with recent studies. In particular, Marshall’s mainly divided into two different widespread externality focuses on the influence of ongoing group. The first group of scholars argue that activities occurring in other economies, while there are six types of market failure such as non- Pigou’s externalities implies the impact of global competitive markets, externalities, public goods, environmental factors, namely increased rates of asymmetric or uncertain information, global warming and intergenerational equity in incomplete or missing markets, and development theory. Additionally, Coase macroeconomic business cycles (Dollery and illustrates externality with the establishments of CURRENT RESEARCH JOURNAL OF PEDAGOGICSISSN 62 – 2767-3278 https://masterjournals.com/index.php/crjp CURRENT RESEARCH JOURNAL OF PEDAGOGICS 2(6): 62-67, June 2021 DOI: https://doi.org/10.37547/pedagogics-crjp-02-06-13 ISSN 2767-3278 ©2021 Master Journals Accepted 12thJune, 2021 & Published 17th June, 2021 factories and their impact on fish farms, since Foreign Direct Investment (hereinafter FDI) waste water from manufacturing is negatively industry, mainly through the spillover effect of associated with fish livestock. technology or knowledge. For instance, Hao et al. (2020) studied the impact of FDI on pollution However, later in 2011, Shiqing and Jiapei level in 30 provinces of China as an externality. summarized the research on externalities by The results show that although the brought Marshall, Pigou, Coase and other scholars and innovations thanks to FDI help reduce the highlighted two important features of emission of the sulfur dioxide and smoke dust in externalities; non-participatory decision-making certain sectors, it increases the demand for and lacked an effective feedback mechanism. oxygen substantially. Likewise, Yunus et al. Following features, they define the externality in (2015) investigated the positive as well as a comprehensive way saying that ‘in a particular negative externalities associated with inward economic activity, externalities are the effects on FDI in Malaysia. His findings report that the parties that have not participated in the decision spillover effects of FDI play a key role in skill and lack an effective feedback mechanism to upgrading of labor sector, while making some compensate’ (cited in Jing and Sun, 2018, p151). part of labor force redundant due to brought Earlier in 1958, a famous economist Francis technological advancements in high-level Bator analyzed the causes of market failure by industries. means of externality. In particular, he classified Market failure: causes and government the externalities into three polar types, namely intervention ownership externalities, technical externalities and public good externalities. He also adds that if Economic theories and studies so far attempted economies operate ideally, dynamic markets will to explain the possible reasons for the presence not be pareto-efficient the circumstances of of market failure in economics. By well-excepted institutions, laws, customs, or feasibility. This belief, the existence of dysfunctional nature of phenomenon persists in private venues, such as price systems and structural imperfections are the relationship of beekeepers with orchardists, considered principal causes of market failure. and in the public sphere, the fishing waters of the They are mainly the existence of monopolistic, public domain. duopolistic or oligopolistic markets, externalities, de-merit goods, asymmetric Furthermore, Bryan Caplan categorizes the information, weak property rights, inequality or externalities into two types; merit externalities, unstable market characteristics. demerit externalities. Particularly, the merit externalities are considered as costs that To address the probl