is likely to suffer losses. If it cannot change its ways, it will go out of business. This self-correcting mechanism

in the marketplace can have harsh effects on workers or on local economies, but it also puts pressure on firms

for good performance.

Government agencies, however, do not sell their products in a market. They receive tax dollars instead. They

are not challenged by competitors as are private-sector firms. If the U.S. Department of Education or the U.S.

Department of Defense is performing poorly, citizens cannot purchase their services from another provider

and drive the existing government agencies into bankruptcy. If you are upset that the Internal Revenue Service
444 18 • Public Economy

is slow in sending you a tax refund or seems unable to answer your questions, you cannot decide to pay your

income taxes through a different organization. Of course, elected politicians can assign new leaders to
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