Public-choice problems explained in one sentence

I devoted a research brief last year discussing “Public-Choice Problems, and Why Special Interests Love Them So.” Public-choice problems are very difficult problems to overcome, even when there is broad agreement across political parties and society that they need to be fixed.

Here’s why:

Voters face relatively high costs for the small benefit from staying highly informed about government. Any policy that benefits special interests doesn’t cost each voter very much by itself (as opposed to the cumulative cost of policies favoring special interest).

So voters, acting out of their own self-interest and best use of their resources, tend to be relatively ignorant about all the ins and outs of government and lawmaking.

It’s different for special interests. The benefits they receive from favorable laws are concentrated and large, and so are the costs to them from losing such laws. So acting out of self-interest and best use of their time and money, they tend to be involved in lobbying, informing, and seeking to influence public policy.

There’s another group involved, too, and they are also acting out of their own self-interest: the politicians making the laws. They tend to hear most from (and benefit most from) the special interests. They’re unlikely to hear much from everyone else, who stand to lose just a little as special interests gain a lot.

The new audit of the economic impact of Georgia’s film tax credit, which is a strong example of a public-choice program, put it this way on page 35:

Prior to voting on such incentives, legislators may receive economic impact information from industry lobbyists or other incentive beneficiaries, but they rarely receive such information from objective sources.

This sentence comes in the section discussing the audit’s Finding 6: “Limited information has been available to decision makers and the general public regarding the film tax credit.”

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

Reader Comments