The analytical framework used in this report is market failure. It should be noted that a comparative institutional framework was originally going to be used. However it is an issue which is cross-cutting and covers many different areas such as police and transport, hospitals, injuries, housing, planning and car manufacturers. Countries such as Australia display higher statistics, but relatively speaking New Zealand has a worse record. Additionally previous research had already covered this point. It therefore appeared as though something else may be occurring.
Governments play a large role in establishing the “rules of the game” for institutions and society. However, sometimes these institutions deliver unsatisfactory results or markets simply may be unable to deliver the expected results. Governments then decide whether or not they need to intervene. In deciding this, they realise that action can come at a cost, and therefore it needs to be weighed up against the faults that exists. There is an issue that governments may at times, produce results that are as bad, if not worse than the existing problem. Governments may intervene when there has been a market failure. Market failure as a framework of analysis identifies failures that are occurring in a particular situations and calls upon governments to help solve the problem.