If You Build It, Will They Come?-Part 1

Special interest groups are able to have a substantial impact on the political system. Such groups can provide valuable services to individuals and to elected officials. They also can generate substantial benefits to a small minority while imposing a small cost on many other people. This can happen because the costs of a particular program may be spread widely. Voters may not notice the small increased cost to them and therefore may not take the time to study the matter in order to hold their elected officials more accountable.

Elected officials, like other people, respond to incentives. Being re-elected is often an important incentive to government leaders. Re-election depends on earning votes, a scarce "good." This means that elected officials have a strong incentive to work on behalf of special interest groups that they think can be helpful in finding votes at the next election. This may occur even if the particular program they put into effect is economically inefficient.

Research

Go to the Heartland Institutes web page at http://www.heartland.org/Article.cfm?artId=9474. Make a list of what the author thinks are the real reasons we subsidize sports. What is the relationship between the number of team franchises and the number of cities interested in hosting them? What is the term used to describe this relationship? How do incentives work to encourage public subsidies of stadiums? What incentives might special interest groups offer to individuals? What advantages might interest groups offer to elected officials?

Research

Select two articles from the following websites and evaluate the author's arguments. List the arguments for and against subsidies for stadiums. Identify biases and errors in economic reasoning.

• Steelers, Pirates to pay more for new stadiums
• Columnist Ron Cook: Plan B flawed; option is worse
• Sunday Op-Ed: Let's grow with Plan B
• Series of articles on Plan B for Pittsburgh
• FRESNO'S NEW BASEBALL STADIUM BETTER NOT BE PAID FOR WITH MUNICIPAL BONDS!
• Federal subsidies on rise for new stadiums
• As public funding increases for sports, so does opposition
• Arizona announces plans for stadium
• Board to consider Plan B next month
• Economic Impacts and Social Benefits of the Padres

Discussion

Discuss the following questions:

How do each of the following benefit from public subsidies for stadiums

• team owners and players
• construction contractors
• labor unions
• newspaper reporters, editors, and publishers
• politicians

Activity

In Pennsylvania the state lottery funds programs for senior citizens. The average age of citizens in Pennsylvania is above the national average. Senior citizens tend to vote in elections.

Write an editorial on the likelihood of Pennsylvania using a new state lottery game to fund stadium construction and post it in the web conference.

Now go on to Part 2