ECON 103 Lecture Notes - Lecture 11: The Technique, Advocacy Group, Rent-Seeking
18 Aug 2018
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Chap 6 the economic of collective decision making. Transfer payments tax income from some and transfer it to others. Social security, unemployment benefits, and welfare are examples of transfer payments. Direct income transfers now account for almost 45% of the total spending of government. There is seldom a bundle purchase problem in markets. Public choice analysis - applies the tools of economics to the political process in order to provide insight concerning how the process works. Self-interested behavior is present in both market and political sectors. The political process can be viewed as a complex interaction among: voter-taxpayers, politicians, bureaucrats. Incentives confronted by the politician: political officials are interested in winning elections. Just as profits are the lifeblood of the market entrepreneur, votes are the lifeblood of the politician: ratio(cid:374)ally u(cid:374)i(cid:374)for(cid:373)ed (cid:448)oters ofte(cid:374) (cid:373)ust (cid:271)e (cid:272)o(cid:374)(cid:448)i(cid:374)(cid:272)ed to (cid:862)(cid:449)a(cid:374)t(cid:863) a (cid:272)a(cid:374)didate. Legislative bodies are something like a board of dire(cid:272)tors.
