Why do economists generally favor vouchers to achieve an efficient outcome?

What will be an ideal response?

Economists generally favor vouchers because they allow for competition and they limit the opportunity for overproduction. First, a voucher gives the consumer of the good the buying power, which forces producers to compete for business. Vouchers allow for competition between public producers and private producers. Second, vouchers can also limit overproduction because setting the value of the vouchers and the total voucher budget is transparent so that bureaucrats have less ability to pad their budgets. In addition, vouchers spread the spending over millions of consumers so no one consumer has the incentive to lobby for increased spending.

Economics

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