What is public choice theory

Source

• public choice theory: the application of economic methods to the study of political processes
  • government is a complex social machine inhabited by people who are the same as everyone else, and in which periodic elections play a central role
• economists are interested in human action, and they believe that action involves choice
  • choice involves comparing alternatives
  • always ask: compared to what?
• public choice economists ask this question in relation to alternative ways of organizing decision making
  • compare the outcomes of market decisions to political decisions
• asking "what should government do about this?" is the wrong question because it makes certain assumptions about what kind of actor government is and what influences its decisions
  • the government is thought as a benevolent despot
  • this conception is dangerous
• government is not a single agent
  • it is made by people who want to win the next elections
• public choice theorists want to put the democratic election process center stage in any analysis of policy
  • what policy is likely to emerge from real-world democratic politics, and how does that compare to market alternatives?
• people also assume government is motivated to choose the policies that benefit the greater good
  • people in markets are motivated by self-interest
  • why should politicians be any different?
• when assessing policy
  • don't ask what is the best policy we can imagine
  • rather, what is the policy most likely to emerge
• they analyze
  • how majority rule
  • incentives that parties and candidates have to shift the cost of their programs on future tax payers and the associated debt problem
  • incentive for the current regime to make it appear as though their policies cost less than they actually do
  • lobbying processes, what political donors expect to gain
• james buchanan described public choice as politics without romance
• winston churchill said that democracy is the worst system of government, except for all the rest
  • democracy is the best system available
  • but heroic views of what democracy can achieve encourage false expecations
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