When a few people share the benefit from a project and a large number of people pay for the cost,the government is more likely to approve inefficient projects.

Question

Quizplus · Accepted Answer

This is known as the "special interest effect" and is a common phenomenon in politics. When a small group of people stand to benefit greatly from a project, they are often willing to lobby and advocate for its approval, while the larger group of taxpayers bear the cost without as much motivation to oppose it. This can lead to inefficient or wasteful projects being approved due to political pressure.

When a Few People Share the Benefit from a Project