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Quotation of the Day…

… is from page 228 of my teacher Randy Holcombe’s excellent 1985 book, An Economic Analysis of Democracy (links added):

The theoretical work done during these decades [1960s and 1970s] has provided explanations for the poor actual performance of government in solving social problems.  Many specific studies … cite problems inherent in the existing incentive structure embodied in political institutions.  The suggestion is that existing political institutions are not well suited for allocating economic resources.  More far-reaching are general studies, such as Arrow’s that show the general inappropriateness of any political institution as a mechanism for choosing social conditions.  Arrow showed that under reasonable conditions, collective decision making in any form is not capable of making rational choices among alternative social states.