Moral hazard makes the public vulnerable to abuses of the power delegated to elected agents.

Question

Quizplus · Accepted Answer

Moral hazard is the risk that someone will act in a more risky manner because they are not bearing the full costs of their actions. This can create a situation where the public is vulnerable to abuses of power by elected agents who may act in their own self-interest rather than in the best interest of the public. Thus, moral hazard can make the public vulnerable to abuses of power delegated to elected agents.

Moral Hazard Makes the Public Vulnerable to Abuses of the Power