University of Chicago Law Review, Vol. 67, pg. 941, 2000
This paper looks at how economic theory explains actions taken by government.
Public choice theory can help resolve some puzzles in government, but so far its ideas have had limited influence.
- The theory of “Public Choice” looks at whether one can explain how governments and regulators behave by viewing public sector actors as selfish and self-interested. Four main types of public choice look at:
- Individuals in government.
- On how voters and other large populations behave (“aggregation problems”).
- Interest groups.
- Constitutions and other ground rules.
- The idea in public choice that interest groups can influence government to bring about outcomes that are unfair or inefficient is not new, but public choice helps understand it.
- Public choice theory looks at whether direct democracy makes sense, to allow states to secede, at presidential versus parliamentary systems, how to protect minorities, and other topics.
- Public choice theory is criticized for trying to oversimplifying very complex human behavior. E.g. most politicians do not care only about being re-elected. But some simple public choice ideas are very appealing, such as the “prisoner’s dilemma” game.
- Public choice theory threatens people because it suggests that trying to solve problems through the political process will make things worse. So far, public choice theory has not influenced the law as much as law and economics.