When decisions are made democratically, the economic and political power of all individuals will be equal. The reality of the aggregate consumption-aggregate payment link imposed by scarcity is present in both the market and public sectors. Assume there is a group of sellers that can restrict entry into a market. Compared to a competitive situation, the group will often be able to enlarge its total profit by raising price and reducing output. As an additional consumer obtains the benefits of a public good like national defense, the benefits to existing consumers decline.
Brand names indicate goods that are of the highest possible quality.
When evaluating activities of the public sector, public choice economists focus on the following driving force. The people who benefit from a government program pay the costs of the program roughly in proportion to the benefits that each receives. The benefits are highly concentrated, and the costs are widespread among voters. The costs are highly concentrated, and the benefits are widespread among voters. The benefits accrue primarily in the future, while the costs are more visible during the current period.