Why do pensions get so lavish? A 2009 study by the Cato Institute argued that in negotiations between elected officials and government unions, nobody really represents the taxpayers. Elected officials are far more responsive to organized interests like unions than to the unorganized citizen-taxpayers. In effect, the principal-agent problem that analysts of the corporation worry about is far worse in government because it is very difficult for taxpayers to control their theoretical agents, the elected officials and appointed managers of government.Whole thing here.
Posted on December 19, 2011 Posted to Cato@Liberty
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