Evaluate the case for government provision of goods and services such as flood defence schemes.

(Apologies for the formatting. If you're interested I am happy to send you a pdf version of this plan)This is a classic A level economics question where the overall answer structure is applicable to any “Evaluate” question. Intro: State your final judgement clearly. It is helpful for the examiner (and you!) if you lay out your argument at the beginning. Define: Select any econ-specific terms. Ask yourself: would a friend who doesn’t study economics know what this word means? Flood defence schemes are an example of positive externalities. This means the total "social" benefit of the scheme is not fully accounted for in the market price. There are elements of the good that are external to the market. Describe: Outline the relevant economic theory. (A graph is useful here, but only draw it if you can describe it). If a good or service has a positive externality, then it will be supplied below the socially efficient level. Equivalently, the market allocation does not maximise both consumer and producer surplus. (On a supply-demand graph, for a positive externality, the downward-sloping social demand curve is above the private demand curve.) Illustrate: Apply examples. If there is an example in the question, always use it. When an individual purchases flood defence protection for their home, they do not fully account for the benefit the defence will provide to all the other homes in the neighbourhood. Therefore they purchase less than the socially optimum amount of flood defence. Analyse: Give reasons for and against. This is absolutely vital for an evaluate question! When planning, use a spider-diagram, a table or a list, like below: + Government provision can attain efficient allocation when market forces cannot due to externalities. One method is taxes and subsidies. For positive externalities, a tax equal to “the social benefit” not accounted for by economic agents can lead to efficient output (labelled on the graph).When writing, signposting is important as key phrases like these lead the examiner through your argument: On the other hand… However, it must be noted that... - Any imperfect information could lead to miscalculating the government tax. If the tax is too large or too small, it could potentially lead to even greater inefficiency than the externality alone (labelled on the graph)Evaluate: Weigh up the reasons for and against, then state a clear judgement. This is your conclusion! Reusing words in the question makes it super clear you are answering it: There is a case for government provision for goods and services such as flood defence schemes, however whether government provision is in fact more efficient than the competitive market depends on the government’s ability to accurately determine the magnitude of, and the recipients of, the benefits of flood defence.