Microeconomics › Section R · Public economy › Topic R.3
Flaws in democratic decisions and government failure
Markets can fail, and earlier sections showed how government might help. But voting rules have logical quirks, and government agencies face weaker pressure to correct mistakes than firms do. Good policy compares an imperfect market with an imperfect government, not with a perfect one.
In this topic
- Majority rule is not as simple as it sounds
- Split votes
- The median voter theory
- Worked example: a park budget
- Voting cycles
- Worked example: whoever sets the agenda wins
- Government failure
- No self-correcting mechanism
- Worked example: a capped taxi market
- Choosing policies wisely
- Common mistakes to avoid
- Key takeaways
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