Rationality and Rational Choice – Comprehensive Study Notes

Historical Backdrop & The Five Major Intellectual Developments

• Political science has wrestled with how to define “rationality” for at least half a century.
  • Five pivotal developments identified in the chapter:
  • 1960s exploration of the link between public policy, decision processes & rationality.
  • Herbert A. Simon’s model of bounded rationality and its limits on decision makers.
  • Applications/legacy of bounded rationality (e.g., Graham Allison’s Cuban-missile models).
  • Emergence of modern rational-choice theory via key economists & political scientists in the 1950s–60s.
  • Ongoing debate (1990s → Perestroika era) over rational-choice’s value, scope & methodology.
  • Central tension: “economic” vs. “political” definitions of rationality.

Policy Making, Decision Making & Rationality (1950s–60s)

• Charles Lindblom – “The Science of ‘Muddling Through’” (1959)

  • Contrasts two analytic methods:
  • Rational-Comprehensive (“root”): advance goals, exhaustive means–ends analysis, data-rich, theory-driven, seeks the best option.
  • Successive Limited Comparisons / Incrementalism (“branch”): few options, marginal change, limited analysis, process-oriented consensus = goodness.
  • Deems rational-comprehensive both empirically unrealistic & normatively undesirable in pluralist democracies.
  • Emphasises political pluralism; rationality ≠ rigid optimization but pragmatic negotiation.

• Paul Diesing (1962)

  • Warns against equating rationality solely with technical/economic efficiency.
  • Proposes five forms: economic, technical, social, legal, political – urging broader philosophical study.

• Aaron Wildavsky (1966)

  • Critiques cost-benefit, systems analysis, PPBS as narrow economic rationality.
  • Introduces “political rationality”: leaders weigh resources for support, reelection risk, and public hostility – not just dollar efficiency.

Herbert Simon, James March & the Limits of Rationality

• Objective vs. Subjective Rationality (Simon 1957)

  • Objective: $\text{choice} \rightarrow \max( \text{given values} )$ – empirically testable “correct” decision.
  • Subjective: judged relative to the decision maker’s actual knowledge and cognitive limits.
  • Human cognition rarely meets objective standards in complex organizations.

• Critique of “Economic Man” (Simon 1955)

  • Classic model assumes:
  • Complete information, stable preferences, unlimited computational skill, simultaneous evaluation of all alternatives.
  • Reality: limited knowledge, constrained search, imperfect calculation.

• Bounded Rationality / Satisficing (Simon 1955; March & Simon 1958)

  • Decision makers stop at the first satisfactory alternative – “satisficing.”
  • Sequential rather than simultaneous evaluation.
  • Organizational structures supply “repertoires,” standard operating procedures (SOPs) to compensate for cognitive limits.
  • Later labelled “procedural rationality” – focus on how choices are made, not whether they are globally optimal.

• Key takeaway: Individuals are “intendedly rational” but constrained by information, attention & organizational context.

Legacy & Illustrations of Bounded Rationality

• Allison’s Essence of Decision (1971)

  • Model 1 – Rational Policy: unified actor, utility maximization among clear alternatives (e.g., do-nothing, blockade, strike).
  • Model 2 – Organizational Process: outputs shaped by SOPs, “sequential attention to goals,” bounded rationality visible in bureaucratic routines (e.g., McNamara vs. Admiral Anderson blockade dispute).
  • Critics (Bendor & Hammond 1992): Allison mis-reads Simon; SOPs enable rather than handicap rationality.

• Contemporary public-policy insights (Jones 2003)

  • Bounded rationality explains surprises & inefficiencies in gov’t programs via information gaps & non-rational organizational dynamics.

Foundations of Modern Rational-Choice Theory (1950s–mid-1960s)

• Kenneth Arrow – Social Choice & the $\text{(Im)possibility}$ Theorem

  • Demonstrates potential conflict between individually rational preferences and collectively rational social ordering.
  • Raises specter that democracy may need dictatorship to escape paradoxes.

• Anthony Downs – An Economic Theory of Democracy (1957)

  • Imports utility maximization into electoral competition:
  • Voters choose parties/candidates that maximize expected utility (not purely monetary).
  • Parties act as rational vote-maximizers in “ideological space.”
  • Anticipates bounded rationality via voter information uncertainty.

• Buchanan & Tullock – Calculus of Consent (1962)

  • Individuals seek “more rather than less” across political settings.
  • Market logic applied to constitutional design; rational choice bounded by constitutional rules (a form of institutional constraint).

• Mancur Olson – Logic of Collective Action (1965)

  • Rational individuals free-ride in large “latent” groups unless selective incentives or coercion exist.
  • Defines rational behaviour as efficient pursuit of stated objectives – whether selfish or altruistic.

• William Riker – Theory of Political Coalitions (1962)

  • Fuses game theory with politics; politically rational man “would rather win than lose.”
  • Promotes “as-if” assumption: actors behave as if maximizing utility; empirical validation follows.
  • Later develops “heresthetics” – strategic manipulation of agenda & language.

Hallmark Features of Rational-Choice Scholarship

• “As-if” instrumentalist modelling $\Rightarrow$ testable hypotheses.
• Tendency toward internal problem-solving (anomaly accommodation) rather than paradigm rejection.
• Continual evolution – thin vs. thick models:
  • Thin: minimal assumptions (goal-oriented, self-interested, utility-maximizing).
  • Thick: enrich with beliefs, culture, psychology, institutions (Ferejohn 1991; Friedman 1996).
• Formal tools: game theory, spatial models, calculus of voting $P!B - C + D$ (Riker & Ordeshook 1968).

Thickening & Institutional Turns

• Shepsle & Weingast: later “generations” of congressional studies build committees, parties & rules into models.
• Moe (2005): calls for explicit treatment of power within rational-choice institutional analysis.
• Feiock (2007) & Tsebelis (1990): integrate bounded rationality with institutional contexts (nested games, regional governance).
• Elinor & Vincent Ostrom (Bloomington school)
  • Institutional Analysis & Development (IAD) framework – blends bounded rationality, game theory, and rule-based environments to solve collective-action problems (e.g., common-pool resources).

Controversies & Push-Back (1990s–2000s)

• Almond (1991): RC’s utility-maximization is an empty “Scrabble blank tile.”
• Green & Shapiro (1994) Pathologies of RC:
  • Over-formalized, under-substantive; retells old stories in new math.
• Walt (1999): warns of “rigor mortis” in security studies.
• Perestroika Movement (2001 onward)
  • Grass-roots rebellion vs. RC + formalism + quantification.
  • Kasza’s “pirates” metaphor: Riker’s followers hijacking the discipline.
• Later volumes (Monroe 2005) feature continued critiques by Lowi, Beer, etc.

Toward Reconciliation & Future Research

• Monroe (2001): time to shift from “whether” RC is useful to how to build richer political theories.
• Ostrom (2006): RC not “evil” but must avoid arrogance & incorporate broader behavioural insights.
• Second/Third-generation RC increasingly embeds:
  • Bounded rationality,
  • Psychological factors (identity, emotion),
  • Institutional & cultural constraints.

Ethical, Philosophical & Practical Implications

• Democratic accountability: Does self-interest preclude genuine public-interest governance?
• Policy design: Incrementalism & bounded rationality favour politically feasible, knowledge-based tweaks over grand redesigns.
• Collective action: Understanding free-riding drives design of incentives, sanctions, and participatory mechanisms.
• International crises (e.g., Cuban missile): SOP-driven decisions can avert or precipitate conflict.

Key Study Questions & Exam Prompts

• Contrast rational-comprehensive vs. incrementalist decision models – strengths & weaknesses in democratic settings.
• Define bounded rationality; explain satisficing with real-world bureaucratic example.
• State Arrow’s impossibility theorem in your own words; discuss its implications for popular sovereignty.
• Show how Olson’s model predicts low participation in large IGOs; propose institutional fixes.
• Using $P!B - C + D$, explain why people vote despite minimal pivot probability $P$.
• Debate: Is “as-if” modelling scientifically legitimate or a “useful fiction”?

Reference Roadmap for Further Reading

• Foundational texts: Downs (1957), Olson (1965), Buchanan & Tullock (1962), Simon (1957).
• Rational-choice critiques: Green & Shapiro (1994); Almond (1991); Walt (1999).
• Bounded-rationality extensions: March & Simon (1958); Jones (2003); Allison (1971).
• Institutional & thick RC: Ostrom (2005 & 2007); Tsebelis (1990); Moe (2005).
• Methodological reflections: MacDonald (2003); Fiorina (1996).