Distribution of benefits and costs The Senate, the legislature of the fictional country of Romance, is considering legislation that will generate benefits of $25 million and costs of $29 million. For perspective, Romania's population is 60 million.
Passing the legislation is , and if everyone in Romange shared equally in both its benefits and its costs, the Senate will vote the legislation.
If the costs of the legislation are concentrated among a few people instead of widespread among the population, those people will be willing to spend up to lobbying the Senate against the legislation. (Note: Assume that the benefits are widespread; therefore, you can ignore them in the calculations of the few who experience the costs.)
The less widely spread are the benefits of the legislation, the is the likelihood of lobbying for the legislation by those who will incur its benefits.
Suppose that, as before, the costs of the legislation are concentrated among a small group, the benefits are very widespread, and the Senate is responsive to lobbying. The likely amount spent on lobbying for the legislation is , in which case the Senate will likely vote the legislation.