When policy costs are distributed broadly across millions of people, each individual pays only a small amount. This creates a collective action problem where no single person has sufficient incentive to organize opposition, even though the total cost may be enormous.
Diffuse costs explain why taxpayers often fund programs that benefit only small groups. The structural disadvantage of diffuse interests versus concentrated ones is key to understanding why democratic outcomes sometimes favor special interests over the general public.
Diffuse costs explain why taxpayers often fund programs that benefit only small groups. The structural disadvantage of diffuse interests versus concentrated ones is key to understanding why democratic outcomes sometimes favor special interests over the general public.