Interest groups also reduce transactions costs by giving legislators information. In essence, this means that some market actors know more than others about some crucial facts. Sellers of used cars know more about the quality of their car than prospective buyers do. In an extreme case, asymmetric information can prevent a market from existing at all. The Effects of Asymmetric Political Information A. Public choice economists have extended asymmetric information models to politics.
Politicians know more about project's social benefits than voters do.
But, Wittman points out, public choice economists frequently leap to the conclusion that asymmetric information leads to excessive government. Asymmetric information for used cars reduces demand for used cars. Similarly, asymmetric political information shrinks voters' demand for government . So I'm going to be more reluctant to buy. Only vote for programs that are clearly useful.