Public Sector Economics

In Class Exercise Seven - Logrolling, Special Interest Groups and Government Bureaus

1.  What is the difference between implicit and explicit logrolling.  Provide and example of each.

 

 

 

 

 

2.  What outcome would one expect to see if logrolling were allowed compared to the contrary?

 

 

 

 

3.  Discuss a significant problem with using logrolling as a decision-making mechanism that is supposed to reflect people's preferences.

 

 

 

 

 

 

 

 

4.  In Olson’s “theory of groups” – explain why taxpayers and consumers are usually on the losing end when it comes to the passing of legislation in representative (majority rules) democracy? 

 

 

 

 

 

 

 

5.  Lobbying groups often try to "hide" taxes in order to sell their ideas/projects.  Why do they do this and why does this lead to inefficiency?

 

 

 

 

 

6. Explain why there is a prisoner's dilemma when it comes to cutting special interest projects - even when it would be very efficient to do so!

 

 

 

 

 

 

7.  Explain two reasons why it is difficult to monitor government bureaus.

 

 

 

 

 

 

8.  Discuss two possible ways by which government bureaus can be made more efficient.

 

 

 

 

 

9.  Any other questions on this material?