Editing Government failure (section)

=== State monopolies ===
Most [[State monopoly|government providers operate as monopolies]] (e.g. post offices). Their status is sometimes guaranteed by the government, protecting them from potential competition. Furthermore, as opposed to private monopolies, the threat of bankruptcy is eliminated, as these companies are backed by government money. The companies are thus not facing many efficiency pressures which would push them towards cost minimisation - causing a social inefficiency.<ref name=":3" />

There are still some existing efficiency pressures on state monopoly managers. They mostly come from the possibility of their political masters being voted out of office. These pressures are however unlikely to be as effective as market pressures, the reasons being that the elections are held quite infrequently and even their results are often fairly independent on the efficiency of state monopolies.<ref name=":3" />