Question

General Questions (short simple answers please)

1. What is the connection(relationship) between properties right and infrastructure?

2. How to safeguard the technical integrity (reliability, safety)of local energy systems?Who is responsible?

How to allocate property rights?

3. How do institutions (‘rules’) influence the economic allocation

process?

Answer 1

1.The property rights enables the provision of public good which leads to development of infrastructure and various facilities in the country.

2.The government is responsible for the technical integrity of local energy system. It can regulate and make rules in the favor of them or set property rights.

3.By regulating the market, setting taxes, subsidies etc.

Explanation:

1.The infrastructure are the facilities and basic structure which includes roads, buildings, bridges etc in the country that serves as a public good. The property right is very important for the provision of public good, which is non-rival and non-excludable in nature and thus, anybody can take advantage or benefit for it without voluntary paying for it. This result in free-riding.

Thus, the property rights enables the provision of public good which leads to development of infrastructure and various facilities in the country.

2.By giving them property rights, we can ensure their safety. The government is responsible for the technical integrity of local energy system. It can regulate and make rules in the favor of them or set property rights.

3.Institution influence the allocation by,

• Regulating the markets by itself
• Setting the corrective taxes or subsidies in the market
• Setting property rights