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{{Short description|Economic theory applied to political science}}
{{Distinguish|Social choice theory}}
{{for|the academic journal|Public Choice (journal){{!}}''Public Choice'' (journal)}}
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'''Public choice''', or '''public choice theory''', is "the use of economic tools to deal with traditional problems of [[political science]]".<ref name="Tullock2008">[[Gordon Tullock]], [[The New Palgrave: A Dictionary of Economics|[1987]]] 2008, "public choice", ''[[The New Palgrave Dictionary of Economics]]''. .</ref> It includes the study of [[political behavior]]. In political science, it is the subset of [[positive political theory]] that studies self-interested [[Agent (economics)|agents]] (voters, politicians, bureaucrats) and their interactions, which can be represented in a number of ways—using (for example) standard constrained [[utility]] maximization, [[game theory]], or [[decision theory]].<ref name="Tullock2008"/> It is the origin and intellectual foundation of contemporary work in political economics.<ref name="Alesina2006">Alberto Alesina, Torsten Persson, Guido Tabellini, 2006. "Reply to Blankart and Koester's Political Economics versus Public Choice Two Views of Political Economy in Competition", Kyklos, 59(2), pp. 201–208</ref>

In popular use, "public choice" is often used as a shorthand for components of modern public choice theory that focus on how elected officials, bureaucrats, and other government agents' perceived self-interest can influence their decisions. Economist [[James M. Buchanan]] received the 1986 [[Nobel Memorial Prize in Economic Sciences]] "for his development of the contractual and constitutional bases for the theory of economic and political decision-making".<ref>{{cite web|url=http://nobelprize.org/nobel_prizes/economics/laureates/1986/|title=The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1986|publisher=Nobel Foundation|access-date=2008-10-14|archive-url=https://web.archive.org/web/20081012162515/http://nobelprize.org/nobel_prizes/economics/laureates/1986|archive-date=2008-10-12|url-status=live}}</ref>

Public choice analysis has roots in [[positive economics|positive analysis]] ("what is") but is sometimes used for [[normative economics|normative]] purposes ("what ought to be") to identify a problem or suggest improvements to constitutional rules (as in [[constitutional economics]]).<ref name="Tullock2008" /><ref>James M. Buchanan, 1990. "The Domain of Constitutional Economics", ''Constitutional Political Economy'', 1(1), pp. [http://www.walkerd.people.cofc.edu/400/Sobel/2A-8.%20Buchanan%20-%20Constitutional%20Economics.pdf 1–18].</ref><ref>Compare: [[Dennis C. Mueller]], 2008. "constitutions, economic approach to "''The New Palgrave Dictionary of Economics'', 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_E000212&edition=current&q=Constitutional%20economics&topicid=&result_number=8 Abstract]: "The economic approach to constitutions applies the methodology of economics to the study of constitutions. This entry reviews the normative literature on constitutions, which assumes a two-stage collective decision process, and the positive literature that examines the decisions made by constitutional conventions and their economic consequences"</ref> But the [[normative economics]] of social decision-making is typically placed under the closely related field of [[social choice theory]], which takes a mathematical approach to the aggregation of individual interests, welfare, or votes.<ref>Found in the JEL classification codes at [[JEL classification codes#Microeconomics JEL: D Subcategories|JEL: D71]].</ref> Much early work had aspects of both, and both fields use the tools of economics and [[game theory]]. Since voter behavior influences public officials' behavior, public-choice theory often uses results from social-choice theory. General treatments of public choice may also be classified under [[public economics]].<ref>
At [[JEL classification codes#Public economics JEL: H Subcategories|JEL: HO – General]] of the [[JEL classification codes]] and as in ''[[The New Palgrave Dictionary of Economics]]'', v. 8, p. 864 and [http://www.dictionaryofeconomics.com/search_results?q=public+choice&field=content&edition=all&topicid=H0 Online].
</ref>

Building upon economic theory, public choice has a few core tenets. One is that no decision is made by an aggregate whole. Rather, decisions are made by combined individual choices. A second is the use of markets in the political system.<ref>{{Cite journal|last=Buchanan|first=James M.|date=1964|title=What Should Economists Do?|url=https://www.jstor.org/stable/1055931|journal=Southern Economic Journal|volume=30|issue=3|pages=213–222|doi=10.2307/1055931|jstor=1055931|issn=0038-4038|url-access=subscription}}</ref> A third is the self-interested nature of everyone in a political system. But as Buchanan and [[Gordon Tullock]] argue, "the ultimate defense of the economic-individualist behavioral assumption must be empirical [...] The only final test of a model lies in its ability to assist in understanding real phenomena".<ref name="Buchanan1962">James M. Buchanan and Gordon Tullock, 1962. The Calculus of Consent. Ann Arbor: University of Michigan Press, pp. 28; cf. ibid., 21</ref>

==Background and development==

=== History of social choice and public choice theory ===
{{See also|Social choice theory}}

A 19th-century precursor of modern public choice theory was the work of Swedish economist [[Knut Wicksell]],<ref>Knut Wicksell (1896 [1958]). "A New Principle of Just Taxation", J.M. Buchanan, trans., in [[Richard A. Musgrave]] and [[Alan T. Peacock]], ed. (1958). ''Classics in the Theory of Public Finance'', Palgrave Macmillan, an essay from Wicksell (1896), ''Finanzthcoretische Untersuchungen'', Jena: Gustav Fischer.</ref> which treated government as political exchange, a ''[[quid pro quo]]'', in formulating a [[benefit principle]] linking taxes and expenditures.<ref>• [[Dennis C. Mueller]] (1976). "Public Choice: A Survey", ''Journal of Economic Literature'', 14(2), p. 396. [pp. [http://pages.uoregon.edu/cjellis/441/Mueller.pdf 395–433.] {{webarchive|url=https://web.archive.org/web/20131019084807/http://pages.uoregon.edu/cjellis/441/Mueller.pdf|date=October 19, 2013}}<br /> • James M. Buchanan(1986). [https://www.nobelprize.org/nobel_prizes/economics/laureates/1986/buchanan-lecture.html# "The Constitution of Economic Policy"], IV. Politics as Exchange & V. The Constitution of Economic Policy, Nobel Prize lecture. Republished in 1987, ''American Economic Review'', 77(3), pp. 243–250 {{JSTOR|1804093}}.</ref> American statesman and political theorist [[John C. Calhoun]] is also seen as a precursor to modern public choice theory.<ref name=":2">{{Cite journal |last1=Tabarrok |first1=Alexander |last2=Cowen |first2=Tyler |date=1992 |title=The Public Choice Theory of John C. Calhoun |url=https://www.jstor.org/stable/40751557 |journal=Journal of Institutional and Theoretical Economics |volume=148 |issue=4 |pages=655–674 |jstor=40751557 |issn=0932-4569}}</ref> His writings on political economy anticipate the "public choice revolution" in modern economics and political science.<ref name=":2" />

Some subsequent economic analysis has been described as treating government as though it attempted "to maximize some kind sort of welfare function for society" and as distinct from characterizations of self-interested [[economic agents]], such as those in business.<ref name="Tullock2008"/> This is a clear dichotomy, as one can be self-interested in one area but altruistic in another. By contrast, public choice theory models government as made up of officials who, besides pursuing the public interest, may act to benefit themselves, for example in the [[budget-maximizing model]] of [[bureaucracy]], possibly at the cost of [[Economic efficiency|efficiency.]]<ref name="Tullock2008"/><ref name="Niskanen">William A. Niskanen ([1971] 1994). ''Bureaucracy and Public Economics'', Elgar. Expanded ed. Description and review [http://www.thelockeinstitute.org/books/bureaucracy.html links] {{Webarchive|url=https://web.archive.org/web/20130402183714/http://www.thelockeinstitute.org/books/bureaucracy.html|date=2013-04-02}} and review [https://books.google.com/books?id=QDB-QgAACAAJ excerpts].</ref>

=== Modern public choice theory ===
Modern public choice theory uses the basic assumptions, principles, and methods of microeconomics as analytical tools to study and portray the behavior of subjects in political markets and the operation of political markets. Public choice refers to the process of what public goods are provided, how they are provided and distributed, and the corresponding matching rules that are established. Public choice theory expects to study and influence people's public choice processes to maximize their social utility.

Modern public-choice theory, and especially election theory, has been dated to the work of [[Duncan Black]], sometimes called "the founding father of public choice".<ref>Charles K. Rowley (2008). "Duncan Black (1908–1991", ch. 4 in ''Readings in Public Choice and Constitutional Political Economy'', Springer, p. [https://books.google.com/books?id=3X0HxOHjw8MC&pg=PA83 83.]</ref> In a series of papers from 1948, which culminated in ''The Theory of Committees and Elections'' (1958),<ref>Duncan Black (1958). ''The Theory of Committees and Elections'', 2nd rev. ed, 1998, Springer. [https://www.springer.com/social+sciences/political+science/book/978-0-7923-8110-5 Description] and [https://books.google.com/books?id=CRdnaPy8oB4C&pg=PA1= preview.]</ref> Black outlined a program of unification toward a more general "Theory of Economic and Political Choices" based on common formal methods,<ref>Duncan Black (1950). "The Unity of Political and Economic Science", ''Economic Journal'', 60(239), pp. 506–514 {{JSTOR|2226793}}</ref> developed underlying concepts of what became [[median voter theory]], and rediscovered earlier work on voting theory.<ref name=":0">Duncan Black (1948a). "On the Rationale of Group Decision-making, ''Journal of Political Economy'', 56(1), pp. 23–34 {{JSTOR|1825026}} .<br />• _____ (1948b). "The Decisions of a Committee Using a Special Majority", ''Econometrica'',16(3), pp. 245–261 {{JSTOR|1907278}}.<br />• _____ (1969). "Lewis Carroll and the Theory of Games", ''American Economic Review'', 59(2), pp. [http://rangevoting.org/BlackCarrollAER2.pdf 206–210.]<br />• _____ (1976). "Partial Justification of the Borda Count", ''Public Choice'', 28(1), pp. [https://link.springer.com/article/10.1007%2FBF01718454?LI=true#page-1 1–15].</ref><ref name="Tullock2008"/><ref>Bernard Grofman ([1987] 2008). "Black, Duncan (1908–1991)", ''The New Palgrave Dictionary of Economics'', 2nd Edition. Preview [http://www.dictionaryofeconomics.com/article?id=pde2008_B000145&edition=current&q=&result_number=1 link].</ref> His work also included the possibility of entirely random outcomes in a voting structure, where the only determinant of an outcome is where a particular motion falls in a given sequence.<ref name=":0" />

[[Kenneth J. Arrow]]'s ''[[Social Choice and Individual Values]]'' (1951) influenced the theory of public choice and election theory. Building on Black's theory, Arrow concluded that in a non-dictatorial setting, no predictable outcome or preference order can be discerned for a set of possible distributions.<ref name=":1">{{Cite journal|last=Congleton|first=Roger D.|date=2018-06-01|title=Intellectual foundations of public choice, the forest from the trees|journal=Public Choice|language=en|volume=175|issue=3|pages=229–244|doi=10.1007/s11127-018-0545-1|issn=1573-7101|doi-access=free}}</ref> Among other important works are [[Anthony Downs]]'s ''[[An Economic Theory of Democracy]]'' (1957) and [[Mancur Olson]]'s ''[[The Logic of Collective Action]]'' (1965),<ref name="Olson">Mancur Olson, Jr. ([1965] 1971). ''The Logic of Collective Action: Public Goods and the Theory of Groups'', 2nd ed. Harvard University Press, [http://www.hup.harvard.edu/catalog.php?isbn=9780674537514 Description], [http://www.hup.harvard.edu/catalog.php?recid=24500&content=toc Table of Contents], and [[iarchive:logicofcollectiv00olso_0/page/5|preview]].</ref> which was fundamental in beginning the study of special interests. In it, Olson raises questions about the nature of groups.<ref name="Olson" /> Concentrated groups' (such as farmers') incentive to act in their own interest paired with a lack of organization of large groups (such as the public as a whole) often results in legislation that benefits a small group rather than the general public.<ref name=":1" />

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[[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 and [[constitutional economics]]. The book's preface says it is "about the ''political organization"'' of a free society. But its methodology, conceptual apparatus, and analytics "are derived, essentially, from the discipline that has as its subject the ''economic'' organization of such a society". Buchanan and Tullock formulate a framework of constitutional decision-making and structures that divides decisions into two categories: constitutional decisions and political decisions. Constitutional decisions establish long-standing rules that rarely change and govern the political structure itself. Political decisions take place within and are governed by the structure.<ref>{{Cite book|last1=Buchanan|first1=James|url=http://dx.doi.org/10.3998/mpub.7687|title=The Calculus of Consent|last2=Tullock|first2=Gordon|date=1960|publisher=University of Michigan Press|isbn=978-0-472-06100-6|location=Ann Arbor, MI|doi=10.3998/mpub.7687}}</ref> The book also focuses on [[positive economics|positive-economic]] analysis of the development of constitutional democracy 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 or at least no opposition as a point of departure for social choice.

Somewhat later, [[probabilistic voting theory]] began to displace median voter theory in showing how to find [[Nash equilibria]] in multidimensional space. Peter Coughlin later formalized the theory further.<ref>Peter J. Coughlin (1991). ''Probabilistic Voting Theory'', Cambridge. [http://www.cambridge.org/gb/knowledge/isbn/item1136626/?site_locale=en_GB Description] and chapter-preview [https://books.google.com/books?id=eki8mEYLql8C&pg=PR7=onepage links].</ref>

=== Constitutional economics ===
Constitutional economics is a research program in economics and constitutionalism that has been described as extending beyond the definition of "the economic analysis of constitutional law" to explain the choice "of alternative sets of legal-institutional-constitutional rules that constrain the choices and activities of economic and political agents". This is distinct from explaining the choices of economic and political agents within those rules, a subject of "orthodox" economics.<ref>{{cite book |last=den Hauwe |first=Ludwig Van |chapter=Constitutional Economics II |url=http://dx.doi.org/10.4337/9781845425500.00023 |title=The Elgar Companion to Law and Economics, Second Edition |year=2005 |doi=10.4337/9781845425500.00023|isbn=9781845425500 |url-access=subscription }}</ref>

Constitutional economics studies the "compatibility of effective economic decisions with the existing constitutional framework and the limitations or the favorable conditions created by that framework".<ref>{{Cite journal |last1=Lins |first1=Karl V. |last2=Servaes |first2=Henri |last3=Tufano |first3=Peter |date=October 2010 |title=What drives corporate liquidity? An international survey of cash holdings and lines of credit☆ |url=http://dx.doi.org/10.1016/j.jfineco.2010.04.006 |journal=Journal of Financial Economics |volume=98 |issue=1 |pages=160–176 |doi=10.1016/j.jfineco.2010.04.006 |issn=0304-405X|url-access=subscription }}</ref> It has been characterized as a practical approach to applying the tools of economics to constitutional matters.<ref>{{Citation |last1=Church |first1=Clive |title=3. From the Constitutional Treaty to the Treaty of Lisbon and Beyond |date=2016-01-07 |url=http://dx.doi.org/10.1093/hepl/9780198708933.003.0003 |work=European Union Politics |publisher=Oxford University Press |access-date=2022-04-29 |last2=Phinnemore |first2=David|doi=10.1093/hepl/9780198708933.003.0003 |doi-broken-date=1 July 2025 |isbn=978-0-19-870893-3 |url-access=subscription }}</ref> For example, a major concern of every nation is the proper allocation of available economic and financial resources. The legal solution to this problem falls within the scope of constitutional economics.

Constitutional economics takes into account the significant effects of political economic decisions as opposed to limiting analysis to economic relationships as functions of the dynamics of distribution of "marketable" goods and services. "The political economist who seeks to offer normative advice, must, of necessity, concentrate on the process or structure within which political decisions are observed to be made. Existing constitutions, or structures or rules, are the subject of critical scrutiny".<ref>{{Cite web |title=The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1986 |url=https://www.nobelprize.org/prizes/economic-sciences/1986/summary/ |access-date=2022-04-29 |website=NobelPrize.org |language=en-US}}</ref>

==Decision-making processes and the state==
One way to organize what public choice theorists study is to begin with the state's foundations. According to this procedure, the most fundamental subject is the origin of [[government]]. Although some work has been done on [[anarchy]], [[autocracy]], [[revolution]], and even [[war]], most study in this area is concerned with the fundamental problem of collectively choosing [[constitution|constitutional rules]]. Much of this is based on work by [[James M. Buchanan]]. It assumes a group of people who aim to form a government, then focuses on the problem of hiring the agents required to carry out government functions the members agree on.<ref>{{cite book |last1=Mueller |first1=D.C. |title=The Encyclopedia of public choice |publisher=Kluwer Academic Publishers |location=Boston, MA |isbn=978-0-306-47828-4 |pages=32–33|date=2008-01-25 }}</ref>

==Bureaucracy==
Another major sub-field is the study of [[bureaucracy]]. The usual model depicts top bureaucrats as chosen by the chief executive and legislature, depending on whether the democratic system is [[presidential system|presidential]] or [[parliamentary system|parliamentary]]. The typical image of a bureau chief is someone on a fixed salary concerned with pleasing whoever appointed them. But most [[bureaucrats]] are civil servants whose jobs and pay are protected by a civil service system against major changes by their bureau chiefs. This image is often compared with that of a business owner whose profit varies with the success of production and sales, who aims to maximize profit, and who can in an ideal system [[At-will employment|hire and fire employees at will]].<ref name="Niskanen" /> [[William Niskanen]] is generally considered the founder of public choice literature on [[bureaucracy]].<ref name="Niskanen"/>

The anthropological study of bureaucracy has mostly contributed to our understanding of how various institutions of governance operate, why they achieve the outcomes they do, and what their work cultures are. In this sense, the state and its various branches, including village councils and courts of law, have gotten special consideration. A focus has also been placed on non-state welfare and humanitarian organisations, ranging in size from tiny NGOs to significant supranational institutions like the United Nations.<ref>{{cite encyclopedia|last=Mathur|first=Nayanika|date=9 November 2017|title=Bureaucracy|encyclopedia=[[Open Encyclopedia of Anthropology]]|editor=Stein, Felix|doi=10.29164/17bureaucracy|url=https://www.anthroencyclopedia.com/entry/bureaucracy|access-date=26 May 2023|doi-access=free|url-access=subscription}}</ref>

=="Expressive interests" and democratic irrationality==
According to [[Geoffrey Brennan]] and [[Loren Lomasky]], democratic policy is biased to favor "expressive interests" and neglect practical and [[utilitarianism|utilitarian]] considerations. Brennan and Lomasky distinguish between instrumental interests (any kind of practical benefit, monetary or non-monetary) and expressive interests (forms of expression like applause). According to them, the [[paradox of voting]] can be resolved by distinguishing between expressive and instrumental interests.

This argument has led some public choice scholars to claim that politics is plagued by irrationality. In articles in ''[[Econ Journal Watch]]'', economist [[Bryan Caplan]] contended that voter choices and government economic decisions are inherently irrational.<ref>{{cite journal |last=Caplan |first=Bryan |title=From Friedman to Wittman: The transformation of Chicago political economy |journal=Econ Journal Watch |volume=2 |issue=1 |year=2005 |url=https://econjwatch.org/File+download/63/2005-04-caplan-com.pdf}}</ref><ref>{{cite journal |url=https://econjwatch.org/File+download/81/2005-08-caplan-com.pdf |last=Caplan |first=Bryan |title=Rejoinder to Wittman: True Myths |journal=Econ Journal Watch |volume=2 |issue=2 |year=2005}}</ref> Caplan's ideas are more fully developed in his 2007 book ''[[The Myth of the Rational Voter]]''. Countering [[Donald Wittman]]'s arguments in ''The Myth of Democratic Failure'', Caplan claims that politics is biased in favor of irrational beliefs.

According to Caplan, democracy effectively subsidizes irrational beliefs. Anyone who derives utility from potentially irrational policies like [[protectionism]] can receive private benefits while imposing the costs of such beliefs on the general public. If people bore the full costs of their "irrational beliefs" they would lobby for them optimally, taking into account both their instrumental consequences and their expressive appeal. Instead, democracy oversupplies policies based on irrational beliefs. Caplan defines rationality mainly in terms of mainstream price theory, arguing that mainstream economists oppose protectionism and government regulation more than the general population, and that more educated people are closer to economists on this score, even after controlling for confounding factors such as income, wealth or political affiliation. One criticism is that many economists do not share Caplan's views on the nature of public choice. But Caplan has data to support his position. Economists have in fact often been frustrated by public opposition to economic reasoning. As [[Sam Peltzman]] puts it: <blockquote>Economists know what steps would improve the efficiency of HSE [health, safety, and environmental] regulation, and they have not been bashful advocates of them. These steps include substituting markets in property rights, such as emission rights, for command and control&nbsp;... The real problem lies deeper than any lack of reform proposals or failure to press them. It is our inability to understand their lack of political appeal.<ref>"George Stigler's Contribution to the Economic Analysis of Regulation" 101 J. Pol. Econ. 818, 830 (October 1993)</ref></blockquote>Public choice's application to government regulation was developed by [[George Stigler]] (1971) and Sam Peltzman (1976).

=={{anchor|interests}}Special interests==
Public choice theory is often used to explain how political decision-making results in outcomes that conflict with the general public's preferences. For example, many [[advocacy group]] and [[pork barrel]] projects are opposed by a majority of the populace, but it makes sense for politicians to support these projects. It may make them feel powerful and important, and can also benefit them financially by opening the door to future wealth as [[lobbyists]]. The project may be of interest to the politician's local [[constituency]], increasing district votes or [[campaign finance|campaign contributions]]. The politician pays little or no cost for these benefits, as they are spending public money. Special-interest lobbyists are also behaving rationally. They can gain government favors worth millions or billions for relatively small investments. They risk losing to their competitors if they don't seek these favors. The taxpayer is also behaving rationally. The cost of defeating any one government giveaway is very high, while the benefits to the taxpayer are very small. Each citizen pays only a few pennies or a few dollars for any given government favor, while the costs of ending that favor would be many times higher.

Everyone involved has rational incentives to do exactly what they are doing, even though the general public desires the opposite outcome. Costs are diffused while benefits are concentrated. The voices of vocal minorities with much to gain are heard over those of indifferent majorities with little to individually lose.<ref name="Specialinterests">• William C. Mitchell and Michael C. Munger, 1991. "Economic Models of Interest Groups: An Introductory Survey", ''American Journal of Political Science'', 35(2), pp. 512–546 {{JSTOR|2111373}}.<br />• Gordon Tullock, [1987] 2008. "public choice", ''[[The New Palgrave Dictionary of Economics]]''. 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_P000240&q=rational%20choice&topicid=&result_number=10 Abstract].<br /> • [[Gary S. Becker]], 1983. "A Theory of Competition Among Pressure Groups for Political Influence", ''Quarterly Journal of Economics'', 98(3), pp. [http://www2.bren.ucsb.edu/~glibecap/BeckerQJE1983.pdf 371–400].<br />•_____, 1985. "Public Policies, Pressure Groups, and Dead-weight Costs", ''Journal of Public Economics'', 28(3), pp.&nbsp;329–347. [https://archive.today/20120915084144/http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V76-4591172-4N&_user=10&_coverDate=12/31/1985&_rdoc=1&_fmt=high&_orig=search&_sort=d&_docanchor=&view=c&_searchStrId=1346655200&_rerunOrigin=scholar.google&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=1c816a6df7341b704dcd76e7f485ce1b Abstract] and reprinted in George J. Stigler, ed., 1988, ''Chicago Studies in Political Economy'', pp. [https://books.google.com/books?id=8s5C8ffXdjUC&dq=%22Public+policies%2C+pressure+groups%2C+and+dead+weight+costs%22&pg=PA85 85–105].</ref><ref name="Rentseeking">• Gordon Tullock, [1987] 2008. "rent seeking", ''The New Palgrave Dictionary of Economics'', 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_R000100&edition=&field=keyword&q=special%20interests&topicid=&result_number=1 Abstract].<br /> • _____, 1967. "The Welfare Costs of Tariffs, Monopolies, and Theft", ''Western Economic Journal'', later ''Economic Inquiry'', 5(3), pp. [http://onlinelibrary.wiley.com/doi/10.1111/j.1465-7295.1967.tb01923.x/abstract 224]–232.<br /> • [[Anne O. Krueger]], 1974. "The Political Economy of the Rent-Seeking Society", ''American Economic Review'', 64(3), pp. [http://spot.colorado.edu/~mertens/4221/krueger.pdf 291–303]{{dead link|date=April 2016}}.<br /> • Gordon Tullock, 1989. ''The Economics of Special Privilege and Rent Seeking, Springer. [https://books.google.com/books?id=nJHIZl1ewCMC Description] and chapter-preview [https://books.google.com/books?id=nJHIZl1ewCMC&pg=PR5 links].<br /> • [[Jagdish N. Bhagwati]], 1982. "Directly Unproductive, Profit-Seeking (DUP) Activities", ''Journal of Political Economy'', 90(5), pp. 988–1002 {{JSTOR|1837129}}.''</ref> But the notion that groups with concentrated interests dominate politics is incomplete because it is only one half of political equilibrium. Something must incite those preyed upon to resist even the best-organized concentrated interests. In his article on interest groups, [[Gary Becker]] identifies this countervailing force as the deadweight loss from predation. His views cap what has come to be known as the [[Chicago school of political economy]], which has come into conflict with the so-called [[Virginia school of political economy|Virginia faction of public choice]] due to the former's assertion that politics will tend toward efficiency due to nonlinear deadweight losses and its claim that political efficiency renders policy advice irrelevant.<ref>A Better Kind of Violence: The Chicago School of Political Economy, Public Choice, and The Quest for an Ultimate Theory of Power. Cooper-Wolfling Press, 2016</ref>

While good government tends to be a pure [[Public good (economics)|public good]] for the mass of voters, there may be many [[advocacy groups]] with strong incentives to [[lobbying|lobby]] the government to implement specific policies that would benefit them, potentially at the general public's expense. For example, lobbying by the sugar manufacturers might result in an inefficient [[subsidy]] for sugar production, either directly or by [[protectionist]] measures. The costs of such inefficient policies are dispersed over all citizens and thus unnoticeable to each. Meanwhile, the benefits go to a small special-interest group with a strong incentive to perpetuate the policy by further lobbying. Due to [[rational ignorance]], the vast majority of voters are unaware of the effort; in fact, although voters may be aware of special-interest lobbying efforts, this may merely select for policies even harder for the general public to evaluate rather than improving their overall efficiency. Even if the public could evaluate policy proposals effectively, it would find it infeasible to engage in [[collective action]] in order to defend its diffuse interest. Therefore, theorists expect that numerous special interests will successfully lobby for various inefficient policies. In public choice theory, such inefficient government policies are called ''[[government failure]]'' – a term akin to ''[[market failure]]'' from earlier theoretical [[welfare economics]].<ref name="Specialinterests" />

==Rent-seeking==
A field closely related to public choice is the study of [[rent-seeking]]. This combines the study of a market economy with that of government and so could be seen as a [[new political economy]]. Its basic thesis is that when both a market economy and government are present, government agents may rent or sell their influence (i.e., vote) to those who wish to influence lawmaking. The government agent stands to benefit from support from the party seeking influence, while that party seeks to benefit by implementing public policy that benefits them. This essentially results in the capture and reallocation of benefits, wasting the benefit and any resources used from being put to productive use in society. This is because the party attempting to acquire the benefit will spend up to or more than the benefit accrued, resulting in a zero-sum or a negative sum gain. The real gain is the gain over the competition. This political action will then be used to keep competition out of the market due to lack of real or political capital.

Rent-seeking is broader than public choice in that it applies to autocracies as well as democracies and therefore is not directly concerned with collective decision-making. But public choice theory must account for the obvious pressure rent-seeking exerts on legislators, executives, bureaucrats, and even judges when analyzing collective decision-making rules and institutions. Moreover, the members of a collective planning a government would be wise to take prospective rent-seeking into account.<ref name="Rentseeking" />

Another major claim is that much political activity is a form of rent-seeking that wastes resources. [[Gordon Tullock]], [[Jagdish Bhagwati]], and [[Anne Osborn Krueger]] have argued that rent-seeking has caused considerable waste.<ref name="Rentseeking" />

==Political stance==
From such results it is sometimes asserted that public choice theory has an anti-state tilt. But public choice theorists are ideologically diverse. [[Mancur Olson]], for example, advocated a strong state and opposed political [[interest group]] lobbying.<ref name="Olson"/> More generally, James Buchanan has suggested that public choice theory be interpreted as "politics without romance", a critical approach to a pervasive earlier notion of idealized politics set against market failure.<ref>Buchanan, 2003</ref>

The British journalist [[Alistair Cooke]], commenting on the Nobel Memorial Prize awarded to [[James M. Buchanan]] in 1986, reportedly summarized the public choice view of politicians by saying, "Public choice embodies the homely but important truth that politicians are, after all, no less selfish than the rest of us".<ref>{{cite podcast | url= http://www.econtalk.org/archives/2015/11/michael_munger_2.html | title= Michael Munger on EconTalk's 500th Episode | website= EconTalk.org | publisher= Library of Economics and Liberty | host= Russ Roberts | date= 23 November 2015 | access-date= 22 December 2015}}</ref>

==Recognition==
Several notable public choice scholars have been awarded the [[Nobel Prize in Economics]], including [[Kenneth Arrow]] (1972), [[James M. Buchanan]] (1986), [[George Stigler]] (1982), [[Gary Becker]] (1992), [[Amartya Sen]] (1998), [[Vernon L. Smith|Vernon Smith]] (2002), and [[Elinor Ostrom]] (2009). Buchanan, Smith, and Ostrom were former presidents of the Public Choice Society.<ref>{{Cite web | url=https://publicchoicesociety.org/about | title=About}}</ref>

==Limitations and critiques==

Buchanan and Tullock outline methodological qualifications of the approach developed in their work ''[[The Calculus of Consent]]'':
:[E]ven if the model [with its rational self-interest assumptions] proves to be useful in explaining an important element of politics, it does not imply that all individuals act in accordance with the [[behavioral assumption]] made or that any one individual acts in this way at all times&nbsp;... the theory of collective choice can explain only some undetermined fraction of collective action. However, so long as some part of all individual behavior&nbsp;... is, in fact, motivated by utility maximization, and so long as the identification of the individual with the group does not extend to the point of making all individual utility functions identical, an economic-individualist model of political activity should be of some positive worth.

[[Steven Pressman (economist)|Steven Pressman]] offers a critique of the public choice approach, arguing that public choice fails to explain political behavior in a number of central areas, including politicians’ behavior and [[voting behaviour|voting behavior]].<ref name="STEVEN PRESSMAN 2004">Pressman, Steven (2004) "What is wrong with public choice", ''Journal of Post Keynesian Economics'', 27:1, 3–18</ref> In the case of politicians' behavior, the public choice assumption that a politician's utility function is driven by greater political and economic power cannot account for various political phenomena.<ref name="STEVEN PRESSMAN 2004 pp. 11">Pressman, Steven (2004) What is wrong with public choice, Journal of Post Keynesian Economics, 27:1, 3–18, [11]</ref> These include why politicians vote against their constituents' interests, why they advocate for higher taxation, fewer benefits, and smaller government, and why wealthy people seek office.<ref name="STEVEN PRESSMAN 2004 pp. 11"/>

As for critiques concerning voter behavior, it is argued that public choice cannot explain why people vote due to limitations in [[rational choice theory]].<ref name="STEVEN PRESSMAN 2004"/> For example, from the viewpoint of [[rational choice theory]], the expected gains of voting depend on (1) the benefit to the voter if their candidate wins and (2) the probability that one's vote will determine the election's outcome.<ref name="STEVEN PRESSMAN 2004"/> Even in a tight election the probability that one's vote decides the outcome is estimated at effectively zero.<ref name="Aldrich, J. 1993">Aldrich, J. “Rational Choice and Turnout.” American Journal of Political Science, 1993, 37 (1), 246–278.</ref> This suggests that even if a voter expects gains from their candidate's success, the expected gains from voting are still near zero.<ref name="Aldrich, J. 1993"/> When this is considered in combination with the multiple recognized costs of voting, such as the [[opportunity cost]] of foregone wages and transportation costs, a self-interested person is theoretically unlikely to vote at all.<ref name="STEVEN PRESSMAN 2004"/> Pressman is not alone in his critique; other prominent public choice economists, including [[Anthony Downs]] in ''[[An Economic Theory of Democracy]]'',<ref>Downs, A. ''An Economic Theory of Democracy''. New York: Harper & Row, 1957 {{ISBN?}}{{Page needed|date=March 2022}}</ref> [[Morris P. Fiorina]],<ref>Fiorina, M. “Information and Rationality in Election.” In J.A. Ferejohn and J.H.Kuklinski (eds.), Information and Democratic Processes. Urbana: University of Illinois Press, 1990, pp. 329–342.</ref> and [[Gordon Tullock]]<ref>Tullock, G. Towards a Mathematics of Politics. Ann Arbor: University of Michigan Press, 1967.</ref> recognize that theorizing voting behavior is a major hurdle for the public choice approach.<ref name="STEVEN PRESSMAN 2004"/>

==See also==
{{cols|colwidth=16em}}

* {{Annotated link |Abilene paradox}}
* {{Annotated link |Choice modelling}}
* {{Annotated link |Economics empiricism}}
* {{Annotated link |Fiscal illusion}}
* {{Annotated link |Flipism}}
* {{Annotated link |Flypaper effect}}
* {{Annotated link |Free-rider problem}}
* {{Annotated link |Political economy}}
* {{Annotated link |New institutional economics}}
* {{Annotated link |Prisoner's dilemma}}
* {{Annotated link |Rational choice theory}}
* {{Annotated link |Realpolitik}}
* {{Annotated link |Regulatory capture}}
* {{Annotated link |Sortition}}
* {{Annotated link |Socialist calculation debate}}
* {{Annotated link |Subsidiarity}}
* {{Annotated link |Tax choice}}
{{colend}}

==References==
{{Reflist|30em}}

==Bibliography==
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* Black, Duncan (1958). ''[[The Theory of Committees and Elections]]''. Cambridge: Cambridge University Press.
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* _____, and Gordon Tullock (1962). ''[[The Calculus of Consent]]''. Ann Arbor: University of Michigan Press.
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* [[Knut Wicksell|Wicksell, Knut]] ([1896] 1958). "A New Principle of Just Taxation", trans. J.M. Buchanan, in [[Richard A. Musgrave]] and [[Alan T. Peacock]], ed., ''Classics in the Theory of Public Finance'', Palgrave Macmillan.

==Further reading==
* {{cite journal |last1=Borcherding |first1=T. E. |last2=Dillon |first2=P. |name-list-style=amp |last3=Willett |first3=T. D. |year=1998 |title=Henry George: Precursor to public choice analysis |journal=[[The American Journal of Economics and Sociology]] |volume=57 |issue=2 |pages=173–182 |doi=10.1111/j.1536-7150.1998.tb03269.x |doi-access=free }}
* {{Cite journal |last1= Hafer | first1= Catherine |last2= Landa | first2= Dimitri | title = Public goods in Federal systems | journal = [[Quarterly Journal of Political Science]] | volume = 2 | issue = 3 | pages = 253–275 | doi = 10.1561/100.00006001 | date = August 2007 | citeseerx= 10.1.1.485.7813 }}
* {{cite book |last1=Tullock |first1=Gordon |last2=Seldon |first2=Arthur |last3=Brady |first3=Gordon L. |title=Government failure : a primer in public choice |date=2002 |publisher=Cato Institute |location=Washington, DC |isbn=1-930865-20-1}}
* {{cite book |last1=Butler |first1=Eamonn |title=Public choice : a primer |date=2012 |publisher=Institute of Economic Affairs |location=London |isbn=978-0-255-36650-2}}
* {{cite encyclopedia |last=Niskanen |first=William A. |author-link= William A. Niskanen |editor-first=Ronald |editor-last=Hamowy |editor-link=Ronald Hamowy |encyclopedia=The Encyclopedia of Libertarianism |chapter-url= https://books.google.com/books?id=yxNgXs3TkJYC  |year=2008 |publisher= [[SAGE Publishing|Sage]]; [[Cato Institute]] |location= Thousand Oaks, CA |doi=10.4135/9781412965811.n250 |isbn= 978-1-4129-6580-4 |oclc=750831024| lccn = 2008009151 |pages=405–407 |chapter=Public Choice Economics }}

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