- Assignment Overview: This assignment is based on an article published in The Economists’ Voice by Cass R. Sunstein, titled ‘The Precautionary Principle as a Basis for Decision Making’, in Volume 2, Issue 2, 2005. The article and rubric (i.e. assessment criteria) are attached to this assignment question. Please read the article and rubric carefully before attempting this exercise. You will also need to draw on other resources available through the library as well as external resources. Please note that you need to provide clear references for your sources when citing research and data.
Questions: Answer all questions. Limit the word count of your assignment to less than 3000. Please use diagrams in your answer when appropriate.
1. In your own words, summarise the article. What is the main message of this article? [8 marks]
2. Conduct your own research of the literature on the ‘precautionary principle’. Describe the ‘precautionary principle’ in your own words and briefly explain the main application of this principle in practice. Do you agree with the evaluation of the principle by the author of the article? Make sure you justify your answer. [8 marks]
3. Provide an in-depth impact analysis of ‘precautionary principle’ in the following two sectors [concrete facts and figures are encouraged]: (i) Pharmaceutical Industry and (ii) Energy Industry. Can you propose an alternative mechanism to overcome some of the limitations of the precautionary principle’ ? [ 8 marks]
4. Explain the principle of perfect competition. What is the relationship between the principle of perfect competition and the precautionary principle? Are they complement to each other? [8 marks]
5. ‘The precautionary principle is frequently paralyzing: It can stand as an obstacle to regulation and nonregulation, and to everything in be-
tween.’ Evaluate this statement of the author in light of post-GFC international regulatory reforms. Do you think the post-GFC international regulatory reforms can prevent future financial crisis? Explain.
[8 marks]
