A recurring final exam question for my undergraduate Public Choice class:

Suppose voters were rational [in the Rational Expectations sense] and the SIVH [Self-Interested Voter Hypothesis] were true.

T, F, and Explain: Democracies would spend a higher share of their budgets on genuine public goods.

Almost no one gets it right – and we cover the most relevant material just one week before the final exam!

Feel free to try your hand in the comments…