1. PUBLIC CHOICE THEORY Oh, No! Another unseen hand metaphor

2. All your life, you’ve been taught

3. Democratic governments try to improve society A responsible electorate can toss the bums out Poor leadership is to blame for political apathy You should vote and participate in the political process

4. Public choice economists say All this good government stuff is bunk!

5. Except for the extreme factions, There’s no difference between the political parties

6. Special interests will prevail over the public interest

7. It is not rational to vote

8. Bureaucrats are inefficient

9. Churchill says - “Democracy is the worst form of government… except for the alternatives”

10. 4 KEY IDEAS IN PUBLIC- CHOICE ECONOMICS

11. 1. Is it rational for government leaders to favor special interests over the general public interest?

12. Special interests have a big stake in government So they take a big interest in government When they give contributions, politicians know it Each member of the public may lose only a little bit, when a special interest gets what it wants – so the public doesn’t pay attention

13. The public tends to be ignorant Lobbyists make themselves experts

14. The more concentrated the benefit, and The more diffuse the cost

15. The more likely the special interest gets its way

16. 2. Why are politicians mainly in the middle of the road?

17. The median-voter hypothesis

18. Prediction #1 – in primaries, candidates take a more extreme position, appealing to the median voter of their party

19. Prediction #2 – in general elections, candidates take a middle of the road position, appealing to the median voter of the general population

20. 3. Are people rational or irrational when they spend little time evaluating candidates before they vote and when they don’t vote?

21. Rational Ignorance Why spend the time to be informed when your single vote counts so little?

22. Why do people even vote at all? Voting is a consumption activity – It provides a feeling of civic duty and You can complain without feeling guilty

23. 4. What is the effect of bureaucratic entrepreneurs on government?

24. A business is successful If it can maximize profit

25. A bureaucrat is successful If she or he can maximize power

26. Bureaucrats have a smaller department if they become more efficient

27. Bureaucrats are rewarded When they expand the duties and clientele of their departments With a larger department comes A larger office A higher salary A larger pension