Wednesday, February 25, 2015

Drew Hanson, chapter 4. Question 4

"The private sector allocates where they will earn the highest return. In contrast, the government allocates resources wherever the political process sends them." "The less the economy is left to politics, the better"

In this chapter, Wheelan makes it very obvious that the incentives for politicians and those in the government (public sector) and civilians who own businesses (private sector). Wheelan shows that in a case where private goods are concerned, the government is not an ideal facilitator. However, we have no choice but to leave capital goods to the government to manage.

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