Jadrian, did you use the terms "internal costs" and "external costs" purposefully? Is that where externalities come from?
As in, "one person gets to decide, and everyone else has to live with it." One company finds it easiest/cheapest to dump chemicals into the river, but everyone downstream has to live with it (pay the price for it).
That's exactly how you want to think about it! Buchanan and Tullock used the term "decision-making costs," but I thought it better to call them internal since the other was external.
But you're right in thinking about it as an externality, since the cost of a "bad decision" is imposed on people who didn't pick the winner.
> So the next time [...] the Senate fails to pass something big, remember that sometimes slow and frustrating is exactly the point
Indeed. Feature, not bug. As I often must remind people lamenting congressional gridlock.
Jadrian, did you use the terms "internal costs" and "external costs" purposefully? Is that where externalities come from?
As in, "one person gets to decide, and everyone else has to live with it." One company finds it easiest/cheapest to dump chemicals into the river, but everyone downstream has to live with it (pay the price for it).
That's exactly how you want to think about it! Buchanan and Tullock used the term "decision-making costs," but I thought it better to call them internal since the other was external.
But you're right in thinking about it as an externality, since the cost of a "bad decision" is imposed on people who didn't pick the winner.