How does scarcity affect the government?


Quick Answer

Scarcity affects the way in which those in government distribute resources. According to Illinois State University's Dr. Jason Yonan, politics is the system that decides how a society allocates scarce resources. Altercation in the availability of resources, whether an abundance or scarcity of a good or service, changes the allocation.

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Full Answer

According to Harper College's Dr. Mark Healy, a scarcity involves a limited supply of a good or service along with a demand for the good or service. Scarcity occurs for both private and public goods. In fact, economists consider many items to be scarce. When a resource is scarce, government officials use restrictions, taxes and laws to determine the allocation. Both elected and unelected officials have the ability and power to divide up a given resource. Political affiliation and debate also influence the way in which a government divides a scarce resource.

Water is one example of a resource that undergoes scarcity. There is typically a finite amount of drinkable water in a given area. Especially in times of drought, a city government decides to increase the tax on water usage or put restrictions on water use. In this way, the government changes the way it allocates its resources due to a scarcity.

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