knowt logo

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

V❀

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

robot