Using market failure analysis to fix social/environmental problems

[Periplus]

Market failure is a pretty self-explanatory term.

One of the main causes of market failure is negative externalities, in which a specific product's consumption/production bears a hidden cost to a third party.

Example of this: Cigarettes (second-hand smoke), carbon emission (environment), noise pollution, congestion.

Below is a quick video (2 mins approx) on how economies should react to these failures in the market.

 

[Periplus]

I think this will be useful for future Somali governments.

This is a very basic economic idea, taught to high school students but rarely practiced by many countries.

Somalia should use market failure analysis to map its mining policy, environmental conservation policy and infrastructure policy. This thinking will also be useful for dealing with cigarette use and khat use in Somalia.

Please share your thoughts below.