Editing Public choice (section)

=={{anchor|interests}}Special interests==
Public choice theory is often used to explain how political decision-making results in outcomes that conflict with the general public's preferences. For example, many [[advocacy group]] and [[pork barrel]] projects are opposed by a majority of the populace, but it makes sense for politicians to support these projects. It may make them feel powerful and important, and can also benefit them financially by opening the door to future wealth as [[lobbyists]]. The project may be of interest to the politician's local [[constituency]], increasing district votes or [[campaign finance|campaign contributions]]. The politician pays little or no cost for these benefits, as they are spending public money. Special-interest lobbyists are also behaving rationally. They can gain government favors worth millions or billions for relatively small investments. They risk losing to their competitors if they don't seek these favors. The taxpayer is also behaving rationally. The cost of defeating any one government giveaway is very high, while the benefits to the taxpayer are very small. Each citizen pays only a few pennies or a few dollars for any given government favor, while the costs of ending that favor would be many times higher.

Everyone involved has rational incentives to do exactly what they are doing, even though the general public desires the opposite outcome. Costs are diffused while benefits are concentrated. The voices of vocal minorities with much to gain are heard over those of indifferent majorities with little to individually lose.<ref name="Specialinterests">• William C. Mitchell and Michael C. Munger, 1991. "Economic Models of Interest Groups: An Introductory Survey," ''American Journal of Political Science'', 35(2), pp. 512–546 {{JSTOR|2111373}}.<br />&nbsp;&nbsp; • Gordon Tullock, [1987] 2008. "public choice," ''[[The New Palgrave Dictionary of Economics]]''. 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_P000240&q=rational%20choice&topicid=&result_number=10 Abstract].<br />&nbsp;&nbsp; • [[Gary S. Becker]], 1983. "A Theory of Competition Among Pressure Groups for Political Influence," ''Quarterly Journal of Economics'', 98(3), pp. [http://www2.bren.ucsb.edu/~glibecap/BeckerQJE1983.pdf 371–400].<br />&nbsp;&nbsp; •_____, 1985. "Public Policies, Pressure Groups, and Dead-weight Costs," ''Journal of Public Economics'', 28(3), pp.&nbsp;329–347. [https://archive.today/20120915084144/http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V76-4591172-4N&_user=10&_coverDate=12/31/1985&_rdoc=1&_fmt=high&_orig=search&_sort=d&_docanchor=&view=c&_searchStrId=1346655200&_rerunOrigin=scholar.google&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=1c816a6df7341b704dcd76e7f485ce1b Abstract] and reprinted in George J. Stigler, ed., 1988, ''Chicago Studies in Political Economy'', pp. [https://books.google.com/books?id=8s5C8ffXdjUC&dq=%22Public+policies%2C+pressure+groups%2C+and+dead+weight+costs%22&pg=PA85 85–105].</ref><ref name="Rentseeking">• Gordon Tullock, [1987] 2008. "rent seeking," ''The New Palgrave Dictionary of Economics'', 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_R000100&edition=&field=keyword&q=special%20interests&topicid=&result_number=1 Abstract].<br />&nbsp;&nbsp; • _____, 1967. "The Welfare Costs of Tariffs, Monopolies, and Theft,"''Western Economic Journal'', later ''Economic Inquiry'', 5(3), pp. [http://onlinelibrary.wiley.com/doi/10.1111/j.1465-7295.1967.tb01923.x/abstract 224]–232.<br />&nbsp;&nbsp; • [[Anne O. Krueger]], 1974. "The Political Economy of the Rent-Seeking Society," ''American Economic Review'', 64(3), pp. [http://spot.colorado.edu/~mertens/4221/krueger.pdf 291–303]{{dead link|date=April 2016}}.<br />&nbsp;&nbsp; • Gordon Tullock, 1989. ''The Economics of Special Privilege and Rent Seeking, Springer. [https://books.google.com/books?id=nJHIZl1ewCMC Description] and chapter-preview [https://books.google.com/books?id=nJHIZl1ewCMC&pg=PR5 links].<br />&nbsp;&nbsp; • [[Jagdish N. Bhagwati]], 1982. "Directly Unproductive, Profit-Seeking (DUP) Activities," ''Journal of Political Economy'', 90(5), pp. 988–1002 {{JSTOR|1837129}}.''</ref> But the notion that groups with concentrated interests dominate politics is incomplete because it is only one half of political equilibrium. Something must incite those preyed upon to resist even the best-organized concentrated interests. In his article on interest groups, [[Gary Becker]] identifies this countervailing force as the deadweight loss from predation. His views cap what has come to be known as the [[Chicago school of political economy]], which has come into conflict with the so-called [[Virginia school of political economy|Virginia faction of public choice]] due to the former's assertion that politics will tend toward efficiency due to nonlinear deadweight losses and its claim that political efficiency renders policy advice irrelevant.<ref>A Better Kind of Violence: The Chicago School of Political Economy, Public Choice, and The Quest for an Ultimate Theory of Power. Cooper-Wolfling Press, 2016</ref>

While good government tends to be a pure [[Public good (economics)|public good]] for the mass of voters, there may be many [[advocacy groups]] with strong incentives to [[lobbying|lobby]] the government to implement specific policies that would benefit them, potentially at the general public's expense. For example, lobbying by the sugar manufacturers might result in an inefficient [[subsidy]] for sugar production, either directly or by [[protectionist]] measures. The costs of such inefficient policies are dispersed over all citizens and thus unnoticeable to each. Meanwhile, the benefits go to a small special-interest group with a strong incentive to perpetuate the policy by further lobbying. Due to [[rational ignorance]], the vast majority of voters are unaware of the effort; in fact, although voters may be aware of special-interest lobbying efforts, this may merely select for policies even harder for the general public to evaluate rather than improving their overall efficiency. Even if the public could evaluate policy proposals effectively, it would find it infeasible to engage in [[collective action]] in order to defend its diffuse interest. Therefore, theorists expect that numerous special interests will successfully lobby for various inefficient policies. In public choice theory, such inefficient government policies are called ''[[government failure]]'' – a term akin to ''[[market failure]]'' from earlier theoretical [[welfare economics]].<ref name="Specialinterests" />