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Too sovereign to fail
Bergerová, Tereza ; Šíma, Ondřej (advisor) ; Pour, Jiří (referee)
This bachelor thesis aims on a comparison of market and government failures. There are many causes of market failure. In this thesis, there are described externalities, monopoly, public goods and asymmetric information. Government failure may be caused by many factors, this work focuses on bureaucracy, lobbyists, rent-seeking and political and economic cycle. All these causes of market and government failures are shown on real instances. One chapter discusses a real case called H-System, which perfectly shows the compatibility of market and government failure. Very important is the comparison of the default of a government and a firm as well. When a firm goes bankrupt, it does not exist anymore. On the contrary, if a state defaults, it still exists. A state is too sovereign to fail - it is too strong, powerful and irreplaceable to fail.
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