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Public choice theory

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Public choice theory is a social science that studies the decision-making behaviors of voters, politicians and government officials from the perspective of economic theory. Its most noted advocate is James M. Buchanan who won The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel for his work on public choice theory. A noted detractor of this theory, and also a winner of the same prize, is Amartya Sen.

Prior to public choice theory, many economists tended to treat government as an infallible actor with perfect information and unlimited power, a sort of bureaucrat god. One insight of public choice theory is that good government is a Public good and hence likely to be underprovided. Bureaucrats and politicians face incentives that tend to lead them to produce inefficient outcomes in some situations. Recognition of this factor tends to increase skepticism regarding the prospect that giving government power over some area of human affairs will hugely increase social welfare. Public choice theorists tend to focus on the question of what laws are likely to pass rather than what laws would maximize human happiness if they were passed.

Mancur Olson is a left-wing researcher of public choice theory. In his books, he has analyzed Japan's and Germany's situation after the second world war, and come to the conclusion that the fast and efficient economic growth owed a big part to the fact that there were few or none political interest groups lobbying at the time, and that the politicians had free hands to implement policies as they saw fit.

Public choice theory is closely related to rational choice theory and behavioral economics.

See also: capture,

Last updated: 10-24-2004 05:10:45