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| ==Background== | |||
| Prior to the emergence of public choice theory, many economists tended to consider the ] as an agent outside the scope of economic theory, whose actions depend on different considerations than those driving economic agents. (The many ''other'' economists who ''did'' place the state and its agents within such theory include ].){{citation needed|date=June 2012}} | |||
| Public choice theory attempts to look at governments from the perspective of the bureaucrats and politicians who compose them, and makes the assumption that they act based on a ] in a self-interested way for the purpose of enhancing their own power and influence. The theory aims to apply economic analysis (usually ] and ]) to the political decision-making process in order to reveal certain systematic trends towards inefficient government policies. There are also Austrian variants of public choice theory (suggested by ], ], ], Lopez, and ]) in which it is assumed that bureaucrats and politicians may be benevolent but have access to limited information. The assumption that such benevolent political agents possess limited information for making decisions often results in conclusions similar to those generated separately by means of the rational self-interest assumptions. ] and ] have also developed the notion of "]".{{citation needed|date=June 2012}} | |||
| ==Development== | |||
| Work on public choice theory began with ], who in 1948 identified the underlying concepts of what would become ]. He also wrote ''The Theory of Committees and Elections'' in 1958. ] refers to him as the "father of public choice theory".<ref name="Tullock2008"/> | |||
| ] and Gordon Tullock coauthored '']'' (1962), considered one of the landmarks in public choice theory. In particular (1962, p. v), the book is about the ''political organization'' of a free society. But its method, conceptual apparatus, and analytics "are derived, essentially, from the discipline that has as its subject the ''economic'' organization of such a society." The book focuses on ] analysis as to the development of constitutional democracy but in an ethical context of consent. The consent takes the form of a ] like ] for making a policy change and unanimity at least no opposition as a point of departure for social choice. | |||
| ]'s '']'' (1951) influenced formulation of the theory. Among other important works are ]'s '']'' (1957) and ]'s '']'' (1965).<ref name="Olson">Mancur Olson, Jr., 1965, 2nd ed., 1971. ''The Logic of Collective Action: Public Goods and the Theory of Groups'', Harvard University Press, , , and .</ref> | |||
| During the same decade, the ] started to replace the median voter theory, since it clearly showed how it was able to find Nash Equilibria also in multidimensional space. The theory was later completely formalized by Peter Coughlin.<ref>{{cite book|last=Coughlin|first=Peter|year=1991|title=Probabilistic Voting Theory |pages=}}</ref> | |||
| ==Notes== | |||
| {{Reflist}} | |||
Revision as of 20:18, 16 February 2013
Background
Prior to the emergence of public choice theory, many economists tended to consider the state as an agent outside the scope of economic theory, whose actions depend on different considerations than those driving economic agents. (The many other economists who did place the state and its agents within such theory include Vilfredo Pareto.)
Public choice theory attempts to look at governments from the perspective of the bureaucrats and politicians who compose them, and makes the assumption that they act based on a budget-maximizing model in a self-interested way for the purpose of enhancing their own power and influence. The theory aims to apply economic analysis (usually decision theory and game theory) to the political decision-making process in order to reveal certain systematic trends towards inefficient government policies. There are also Austrian variants of public choice theory (suggested by von Mises, Hayek, Kirzner, Lopez, and Boettke) in which it is assumed that bureaucrats and politicians may be benevolent but have access to limited information. The assumption that such benevolent political agents possess limited information for making decisions often results in conclusions similar to those generated separately by means of the rational self-interest assumptions. Randall Holcombe and Richard E. Wagner have also developed the notion of "Political Entrepreneurship".
Development
Work on public choice theory began with Duncan Black, who in 1948 identified the underlying concepts of what would become median voter theory. He also wrote The Theory of Committees and Elections in 1958. Gordon Tullock refers to him as the "father of public choice theory".
James M. Buchanan and Gordon Tullock coauthored The Calculus of Consent: Logical Foundations of Constitutional Democracy (1962), considered one of the landmarks in public choice theory. In particular (1962, p. v), the book is about the political organization of a free society. But its method, conceptual apparatus, and analytics "are derived, essentially, from the discipline that has as its subject the economic organization of such a society." The book focuses on positive-economic analysis as to the development of constitutional democracy but in an ethical context of consent. The consent takes the form of a compensation principle like Pareto efficiency for making a policy change and unanimity at least no opposition as a point of departure for social choice.
Kenneth Arrow's Social Choice and Individual Values (1951) influenced formulation of the theory. Among other important works are Anthony Downs's An Economic Theory of Democracy (1957) and Mancur Olson's The Logic of Collective Action (1965).
During the same decade, the probabilistic voting theory started to replace the median voter theory, since it clearly showed how it was able to find Nash Equilibria also in multidimensional space. The theory was later completely formalized by Peter Coughlin.
Notes
- Cite error: The named reference
Tullock2008was invoked but never defined (see the help page). - Mancur Olson, Jr., 1965, 2nd ed., 1971. The Logic of Collective Action: Public Goods and the Theory of Groups, Harvard University Press, Description, Table of Contents, and preview.
- Coughlin, Peter (1991). Probabilistic Voting Theory.