Free «Market Analysis» Essay Paper

1. Market Failure/Inefficiency

There is a market failure which refers to the inability of some of the bridges in the United States to withstand the pressure from the heavy-weight vehicles. The reason for this is that some of them were built several years ago, when there was not a high number of such vehicles. Hence, the need for strong bridges was not particularly important. These bridges are also sometimes too narrow, and, therefore, it causes a lot of traffic to snarl up, because most of the time vehicles have to wait for the others to pass (Pagano and Perry 30).

Although these bridges are not at risk of collapsing, which is not extremely dangerous, they cause a lot of inconvenience, thus calling for several plans to be put in place for their reconstruction or renovation. Once construction has begun for the bridges, there are even more problems that are likely to come up. The first problem is the disruption of traffic flow, because some of these roads will have to be closed, so that the process of construction can go on smoothly. Additionally, there are various impediments that may come up and prevent the timely construction of roads.

The burden of the construction of bridges is often the responsibility of the governments. In most cases in the United States, it is the governments of individual states that have to find ways of funding these projects. In the past, this would be done through the collection of a certain amount of money from the sale of fuel. However, in the recent times, some vehicles have been made eco-friendly (Dunker and Rabbat 66). They are either using electricity or require less fuel. Therefore, the money that is collected from them is also quite little, and, hence, not sufficient for the needed construction activities. It begins to cause a strain in the budgets for these states, because money has to be obtained for the repairs.

Another issue comes after the construction has started. There are a lot of things that are likely to take place, which might hinder the smooth process of construction. There may be issues with the plan or with the financing of the rebuilding process. Sometimes, there may be objections to the activity by parties that may feel that the construction is dangerous, such as the environmentalists (Marcuson 43). Generally, the whole process of coming up with a new or refurbished bridge takes a long time, and in the meantime, motorists continue to be inconvenienced by the old bridges.

2. Efforts by the Private Market to Internalize the Problem

The private market is not able to take any action to alleviate the situation. The reason is that the responsibility of constructing the road belongs to the state, thus making it solely the responsibility of the government. Whenever private companies or individuals come in to take over the work, they will often be allowed to collect toll for a specified period of time, which sometimes may take several years. Governments do not like to pass over this responsibility to the private entities, because there may be incidences, where they may need the toll collected for other governmental purposes. Since the construction will have been done by the private sector, the state will have forfeited its chance of having the money.

The only way in which the private markets can make the situation better is when they are offered contracts for the erection of the bridges. However, it is also not promising without the consent of the state, which is accountable for the granting of contracts. The procedure of giving tenders is also quite long and tiresome. There is a number of procedures that must be followed to make sure that the tenders are awarded to the right persons. One of the main things that are often looked at is the prices that will have been quoted by the contractors. The government will almost always choose the ones that quote the most favorable pikes. However, it may sometimes prove to be dangerous, because they may be awarded to the amateurs, who may not perform up to the required standards (Choe, Gardoni and Rosowsky 871).

Therefore, apart from prices, the other things that will often be looked at are the experience of the contractors and how much time they are likely to need. Selecting contractors based on their experience is probably the best method of making sure that long lasting-bridges are built. Since sometimes the time frame is also used for consideration, the contractors may feel pressure and haste to finish in time, which may cause them to fail in doing a thorough job.

3. What the Government Should Do to Intervene

The government should, first of all, take control of rebranding the bridges so that they match up to the level of the current vehicles on the roads, even the heavy ones. The money that is currently being collected from fuel should be used in the most economical method possible, so that the wastage is minimized, while the output is maximized.
Secondly, due to the concern that has been raised about the government being unable to raise enough money for the reconstruction of the bridges, measures should be put in place to make sure that there is enough money for this venture (Hartgen et al. 12). It can easily be done by squeezing the budget in the areas where a lot of money, which may not be particularly productive, has been allocated. For instance, it is clear that in most states, road construction is not a major concern compared to the need for newer and better bridges. There are also other sections, where a lot of revenue comes from. It could be channeled towards the construction of bridges, because in the current state of affairs, the need for these bridges is only going to grow further.

While seeking contractors, the government should also ensure that the best ones are selected for the sake of having quality bridges. Also, the constructors should be able to look ahead into the future and come up with the plans for the bridges that will serve the population for a long time. The main reason for this problem to be present now is the failure of the future to not think that there will one day come the time, when wider and heavier vehicles will be made, which will create the need for bigger and more lasting bridges.