Public Choice theory admits that both policymakers and bureaucrats have their self-interest and do not serve as pure instruments in maximizing social welfare function. This observation implies that

Question

Public Choice theory admits that both policymakers and bureaucrats have their self-interest and do not serve as pure instruments in maximizing social welfare function. This observation implies that

Answer

impose higher penalties for corruption.

Answer

taxes should be raised to permit higher wages in the public sector so that policymakers have higher incentives to behave orderly.

Answer

state failures can be even more harmful than market failures, which are considered as inevitable. However, the economy might work even with a minimal state which would, in turn, decrease the likelihood of state failures.

Answer

there are not only market failures, but also state failures. However, their impact is limited.

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Public Choice theory admits that both policymakers and bureaucrats have their se...

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