The institutions in somecountries are more efficient than those in others. Land, labor, and capital explanations are clearlyinadequate. World's knowledge available cheaply to all. Collective Belief A. Wittman's arguments about political competition andtransactions costs seem compelling to me. 1. Remember that the key price is the private, marginalcost of irrationality, which can be quite different from the social cost.
Irrationality has to be carefully distinguished frominformation.
Wittman's arguments about information would be basically sound if voterswere rational. Log-rolling can make matters even worse. E. Irrationality on the supply side 1. Yes and no. 2. Probably pays more to justshare the public's biases.