A new law must be consistent with the constitution. The judicial branch can overturn a law if a majority of high court judges believes that it violates some provision of the constitution. Direct taxes, according to the constitution, must be apportioned according to the population of the states. This provision was included in the constitution in order to prevent discrimination against wealthy states. The study of legislatures presents a serious problem for Public Choice.
Economic theory shows that there are many possible market failures.
Not only do many goods have public goods characteristics, the correction of market failures, such as natural monopoly and externalities, has public goods characteristics. Accordingly, economics teaches that the legislature in a democracy has a potentially important function. However, when real legislatures and government administrators are assigned to perform this function, they often fail to perform it. One example is national defense expenditures. Much national defense spending has been shown to be wasteful.