… is from page 262 of 1993 Nobel-laureate economist Douglass North’s October 25th, 1994, lecture, “My Evolution as an Economist,” in Lives of the Laureates, William Breit and Roger W. Spencer, eds. (3rd ed., 1995):
In economic markets there are objective criteria (size, weight, color, etc.) to measure the physical dimensions of goods and services exchanged and legal criteria to measure the property rights dimensions. Enforcement is carried out by the judicial system. Competition is a powerful force to reduce transaction costs but still economic markets are beset by high transaction costs. But political markets are far more prone to inefficiency. What is being exchanged are promises for votes; the voter has little incentive to be informed since the likelihood that his/her vote counts is infinitesimal; there is no comparable enforcement mechanism; and competition is very imperfect. The complexity of the issues (together with the lack of incentives of voters to be informed) leads to ideological stereotyping taking over. In effect, the incentives for efficiency are diluted by the structure of political markets and the complexity of the issues.