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Quotation of the Day…

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… is from page 30 of my colleague Richard Wagner’s superb 1996 monograph, Economic Policy in a Liberal Democracy [2]:

[T]he presence of an unambiguous measure of ex-post success (profit) serves to harness the natural tendency toward overoptimism that otherwise would almost certainly be present when someone else’s money is being spent.  The necessity of putting one’s money on the line and of being responsible for the ultimate outcome surely has a sobering effect on the assessment of the prospects for such projects [that governments typically undertake], an effect that is weakened when tax money is used in a setting where no judgement about profitability has to be faced.