Public Choice Economics Theory Society

Public Choice Advocates, Public Choice Economics Theory

Public Choice Society

Economists assume that individuals are rational in economic affairs; why not assume that they are rational in other affairs as well? This is the question James Buchanan and Gordon Tullock asked in the early 1950s, and so began the public choice school. Tullock and Buchanan left the University of Virginia in the 1960s, partly because of their unorthodox policy positions, and founded the Public Choice Center at the Virginia Polytechnic Institute, moving it in 1983 to George Mason University.

The central idea of the public choice school is that individuals are as rational in their interactions with government as they are in their economic affairs. Government is not an agency for good or for bad; it is simply an agency by which individuals achieve their economic goals through politics. The public choice theorists have devised an economic theory of politics. Using the same framework that classical and neoclassical theory uses in modeling household and firm behavior, they analyze political, or public, choice.

The important insights of public choice theorists have sometimes been ob­scured by the anti-statist views of a number of public choice adherents, just as the insights of economists such as Galbraith have been obscured by their pro-statist views. This is unfortunate on both sides. Public choice theorists have made important contributions to our understanding of both policy issues and economic theory. Economists of all political persuasions agree that government failures—governmental policies that do not achieve the social good—exist and must be included, along with market failures, in our analysis of policy. Of all the critical schools of thought we mention, the public choice school has been the most successful, and their analysis of rent-seeking activities has spread into the mainstream. A number of introductory textbooks with a public choice flavor have been widely adopted. James Buchanan's selection for a Nobel Prize in 1986 also reflects some acceptance from the mainstream. For the most part, however, mainstream economists hesitate to fully accept public choice theory.