Boudreaux on Political Incentives

Incentives matter, and this is why I’d like to see so many things pulled out of the political arena and moved to the private sector. The public/political sector is winner take all, one group forces its will on all. The private sector provides choice.

Politicians live for today – TribLIVE: ” Likewise, this same politician will vote to borrow $1,000 repayable two years from now if these funds can be used to generate even as little as, say, $100 of constituent benefits today. The $100 of benefits today improve the politician’s chances of winning the next election. And at the same time, today’s increase in government indebtedness does little to hurt him at the polls. The reason is that voters don’t begin to feel the burden of that debt until after the next election.

Contrast politicians’ incentives with those of owners of private property. Private property rights give individuals incentives to act responsibly over the long run. For example, even a homeowner who expects to sell her house in a few months has incentives to keep the house in good repair because the price she’ll fetch will reflect how well the house has been maintained.

One of the greatest economic misunderstandings is the myth that government officials are more attentive to the long run than are private entrepreneurs, investors and other owners of private property. Private property rights cause us to live for tomorrow, while the need to win political elections causes politicians to live only for today.”