What would Pareto say about HOAs as “superior” decisions?

Are you familiar with Pareto’s Law, or Pareto Superior transaction? In the higher brainy types people like to talk about economics and wealth distribution, and government efficiency (I think CAI talks about efficient government in its materials).  Here’s what Pareto had to say.

(As these brainy types like  overly broad concepts and formulations, a “point” as used below, designates some measure of the conditions or status of society or government.  A “move” represents some government decision).

(i.) Pareto Superiority = A move from one distribution point to another is said to be superior when at least one party is better off and no one else is worse off. (This includes moves that benefit all parties; the essential concern is that no one is worse off after the move compared to welfare before the move.)

(ii.) Pareto Inferiority = A move from one distribution point to another is said to be inferior when at least one party is worse off (even if all others are better off).

(iii.) Pareto Optimality = There is no superior move possible from the current point of distribution. All possible moves are inferior in nature. Thus, no move can be preferred or defended by policy makers.

For us lowly folk, just focus on who benefits and who gets hurt. (In the world of servitudes, the law talks of the burden and benefited estates).  I can say quite empathetically that most of the HOA legislation cross this country are definitely Pareto Inferior decisions as many people are mandated to give up benefits for the benefits of HOA life, with its unequal application of the laws. Who can argue that no one is worse off by most HOA legislation?

But, what do I know?
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Published in: on February 20, 2012 at 6:56 pm  Leave a Comment  
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