PEST political, economic, social, technological
social efficiency produce and sell product that consumers value
more than costs of production
taxes and productive decrease surplus, reduced quantity sold, efficient
regulations when market is OVERPRODUCING
subsidies increase surplus, increase quantity sold, efficient
when market is UNDERPRODUCING
shortsightedness effect current benefits, unidentified future costs (appeal
to current voters at the cost of future generations)
operational inefficiency maximize future budget by exhausting current,
bureaucrats are less conscious of costs
rent seeking/lobbying 1) find political opportunities and threats
2) inform politicians and influence public opinion
3( form coalitions
special interest effect small group receives benefits at the expense of a
large group
small and concentrated groups gain power
individual benefits > individual costs
majoritarian widely dispersed benefits, widely dispersed costs
no special interests groups on either side
lobbying does not occur
social efficiency produce and sell product that consumers value
more than costs of production
taxes and productive decrease surplus, reduced quantity sold, efficient
regulations when market is OVERPRODUCING
subsidies increase surplus, increase quantity sold, efficient
when market is UNDERPRODUCING
shortsightedness effect current benefits, unidentified future costs (appeal
to current voters at the cost of future generations)
operational inefficiency maximize future budget by exhausting current,
bureaucrats are less conscious of costs
rent seeking/lobbying 1) find political opportunities and threats
2) inform politicians and influence public opinion
3( form coalitions
special interest effect small group receives benefits at the expense of a
large group
small and concentrated groups gain power
individual benefits > individual costs
majoritarian widely dispersed benefits, widely dispersed costs
no special interests groups on either side
lobbying does not occur
