Government-granted monopoly

In economics, a government-granted monopoly (also called a "de jure monopoly") is a form of coercive monopoly in which the government grants a monopoly in a product or service to a private individual or firm, and excludes potential competitors from the market by law, regulation, or other mechanisms of government enforcement. As a form of coercive monopoly, government-granted monopoly is contrasted with natural monopoly (in which competition is economically unviable rather than legally prohibited); amongst forms of coercive monopoly it is distinguished form government monopoly or state monopoly (in which government agencies hold the legally-enforced monopoly rather than private individuals or firms) and from government-sponsored cartels (in which the government forces several independent produces to partially coordinate their decisions through a centralized organization). Advocates for government-granted monopolies often claim that they ensure public control over essential industries; opponents often criticize them as political favors to corporations and as distortions of the free market.

Related Topics:
Economics - Coercive monopoly - Monopoly - Law - Regulation - Government enforcement - Natural monopoly - Government monopoly - State monopoly - Corporation - Free market

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Under mercantilist economic systems, European governments with colonial interests often granted large and extremely lucrative monopolies to companies trading in particular regions, such as the Dutch East India Company. Today, government-granted monopolies may be found in public utility services such as public roads, mail, water supply, and electric power, as well as certain specialized and highly-regulated fields such as education and gambling. In many countries lucrative natural resources industries, especially the petroleum industry, are controlled by government-granted monopolies.

Related Topics:
Mercantilist - Dutch East India Company - Road - Mail - Water supply - Electric power - Education - Gambling - Petroleum

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