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Government failure
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=== Government intervention and evasion === It is believed that when a government tries to levy higher taxes on goods such as alcohol, also called [[Demerit good|de-merit goods]], it can lead to increase attempts of illegal activities as tax avoidance, tax evasion or development of [[grey market]]s, people could try to sell goods with no taxes. Also legalizing and taxing some drugs may arise in a quick expansion of the supply of drugs, which can lead to [[overconsumption]], which can mean a decrease in welfare.<ref name=":3" /> Government subsidies may lead to excess demand, which can be solved in two ways. Either the government chooses to meet all the demand, leading to higher consumption than socially efficient or if it knows the socially efficient amount, it can decide who gets how much of this quantity, a goal accomplished either through queuing and waiting-lists or through delegating the decisions to bureaucrats. Both solutions are inefficient, queueing first meets the demand of people at the front of the queue, which might not be the ones who need or want the product or service the most, but rather the luckiest or the ones with the right connections. Delegating the decisions to bureaucrats leads to problems with human factor and personal interests.<ref name=":3" />
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