Page "Public choice theory" Paragraph 10

While good government tends to be a pure public good for the mass of voters, there may be many advocacy groups that have strong incentives for lobbying the government to implement specific policies that would benefit them, potentially at the expense of the general public.

For example, lobbying by the sugar manufacturers might result in an inefficient subsidy for the production of sugar, either direct or by protectionist measures.

The costs of such inefficient policies are dispersed over all citizens, and therefore unnoticeable to each individual.

On the other hand, the benefits are shared by a small special-interest group with a strong incentive to perpetuate the policy by further lobbying.

Due to rational ignorance, the vast majority of voters will be unaware of the effort ; in fact, although voters may be aware of special-interest lobbying efforts, this may merely select for policies which are even harder to evaluate by the general public, rather than improving their overall efficiency.

Even if the public were able to evaluate policy proposals effectively, they would find it infeasible to engage in collective action in order to defend their diffuse interest.

Therefore, theorists expect that numerous special interests will be able to successfully lobby for various inefficient policies.

In public choice theory, such scenarios of inefficient government policies are referred to as government failure — a term akin to market failure from earlier theoretical welfare economics.