The parliament the legislature of the fictional country of


Distribution of benefits and costs

The Parliament, the legislature of the fictional country of Verben, is considering legislation that will generate benefits of $15 million and costs of $11 million. For perspective, Verben's population is 60 million.

Passing the legislation is EFFICIENT / INEFFICIENT, and if everyone in Verben shares equally in both its benefits and its costs, the Parliament will vote FOR / AGAINST the legislation.

If the costs of the legislation are concentrated among a few people instead of widespread among the population, those who benefit will be willing to spend up to $26 MILLION / $11 MILLION / $15 MILLION / $4 MILLION / $0 MILLION lobbying the Parliament against the legislation. (Note: Assume that the benefits are widespread; therefore, you can ignore them in the calculations of the few who experience the costs.)

The less widely spread are the benefits of the legislation, the HIGHER /LOWER is the likelihood of lobbying for the legislation by those who will incur its benefits.

Suppose that, as before, the costs of the legislation are concentrated among a small group, the benefits are very widespread, and the Parliament is responsive to lobbying. The likely amount spent on lobbying for the legislation is $26 MILLION / $11 MILLION / $15 MILLION / $4 MILLION / $0 MILLION, in which case the Parliament will likely vote AGAINST / FOR the legislation.

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Business Economics: The parliament the legislature of the fictional country of
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