What is the shortsightedness effect? How does the shortsightedness effect influence the efficiency of public-sector action? *  What’s wrong with this way of thinking? “Public policy is necessary to...

What is the shortsightedness effect? How does the

shortsightedness effect influence the efficiency of

public-sector action?

*

 What’s wrong with this way of thinking? “Public

policy is necessary to protect the average citizen

from the power of vested interest groups. In the

absence of government intervention, regulated industries such as airlines, railroads, and trucking will

charge excessive prices; products will be unsafe; and

the rich will oppress the poor. Government curbs the

power of special-interest groups.”