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Anarchy (IV) - The Public Choice Idea

Angelique van Engelen - 5/11/2005

Governments -even the most progressive ones- often tend to keep reform minded individuals on the sidelines. Yet reformists can rely on staunch scientific backing, which is not necessarily very much in the public's eye.

Comparing the extent of power in both public and private sectors and the influence people have in these spheres, is something that features prominently in the work of Nobel Prize winner James Buchanan, who together with Gordon Tullock, invented Public Choice Theory.

This research -it has not become a discipline as such- is a branch of economics and developed from the study of taxation and public spending. 'The Calculus of Consent: Logical Foundations of Constitutional Democracy', which the authors co wrote in the Fifties, received widespread public attention in 1986, when Buchanan was awarded the Nobel Prize in Economics for his pioneering work in this area.

Public choice takes the same principles that economists use to analyze people's actions in the marketplace and applies them to people's actions in collective decision making in the political area.

Buchanan and Tullock were most groundbreaking in that they approached politics from the point of view of economists, saying that economists are one sided in devoting all their efforts almost exclusively to understanding and explaining the market sector and human behavior. Buchanan and Tullock say that the public sector is way larger than most people assume because Western democracies allocate between one-third and one-half of their total product through political institutions rather than through markets.

The work of economists in this area raised serious doubts about the political process and it underpinned the findings of others who proved through empirical study that democracy, interpreted as majority rule, could not work to promote any general or public interest.

The writers then came up with ways in which decision making in a democratic environment might be tenable. They stated that majority-voting rules produce inefficient and unjust outcomes and that political stability is secured only by means of discriminating against minorities. "How can democracy, as the organizing principle for political structure, possibly claim normative legitimacy?", they wondered.

Their work continues to date as a rather oversized area of active research both in the US and Europe. The aim is to invent ideas for political reform that give voters-taxpayers-beneficiaries reason to feel assured that their ultimate exchange with the state is yielding them net benefits.

Buchanan and Tullock proposed a two-level structure of collective decision making: "We distinguished between what may be called "ordinary politics" (indicated by decisions made, often by majority voting, in legislative assemblies) and "constitutional politics" (indicated by decisions made on the set of framework rules within which the operation of ordinary politics is allowed to proceed)", says Buchanan. He qualifies further that the two-levels were not so much descriptive of political reality -both in legal theory and in practice, constitutional law had long been distinguished from statute law- but that they merely extended the distinction to the corpus of the theoretical analysis of politics. This research was just on the verge of being developed in the 1950s and 1960s.

A lot has happened since and people are still breaking their heads over solutions to the central problem tackled by the two professors 'why is the general public interest so often subverted by special interests'? A new extensive study on the subject appeared in 2002, entitled 'Understanding Democracy: An Introduction to Public Choice'. It is a comprehensive survey of the field of public choice theory to date for political reformers, written by professor Patrick J. Gunning. It calls into question almost every proposal for government intervention in a host of economic and social problems. If it were more fully understood by citizens of every country, we might see a dramatic decline in the role of government in human affairs.

He also explores questions as to why bureaucracies tend to grow, why they tend to be unaccountable, and why they behave in tyrannical ways? Why aren't well-intentioned and able reformers elected or appointed to positions in government able to reform the System, which seems to have a will and life of its own?

Why do constitutional republics tend to devolve into tyrannies? The work involves game theory ideas and also develops mathematical theories through computer simulation. In the book, Gunning brings the work of these economists up to date and makes their work more accessible to laypersons.