Public Choice: Politics Without Romance

Tuesday, October 28th, 2003

In Public Choice: Politics Without Romance, James Buchanan, winner of the 1986 Alfred Nobel Memorial Prize in Economic Sciences and Distinguished Professor Emeritus of Economics at George Mason University, explains public choice theory, a field he developed:

Nations emerging from World War II, including the Western democracies, were allocating between one-third and one-half of their total product through political institutions rather than through markets. Economists, however, were devoting their efforts almost exclusively to understanding and explaining the market sector. My own modest first entry into the subject matter, in 1949, was little more than a call for those economists who examined taxes and spending to pay some attention to empirical reality, and thus to politics.


Here it is necessary to appreciate the prevailing mindset of social scientists and philosophers at the midpoint of the 20th century when public choice arose. The socialist ideology was pervasive, and was supported by the allegedly neutral research programme called ‘theoretical welfare economics’, which concentrated on identifying the failures of observed markets to meet idealised standards. In sum, this branch of inquiry offered theories of market failure. But failure in comparison with what? The implicit presumption was always that politicised corrections for market failures would work perfectly. In other words, market failures were set against an idealised politics.

Public choice then came along and provided analyses of the behavior of persons acting politically, whether voters, politicians or bureaucrats. These analyses exposed the essentially false comparisons that were then informing so much of both scientific and public opinion. In a very real sense, public choice became a set of theories of governmental failures, as an offset to the theories of market failures that had previously emerged from theoretical welfare economics. Or, as I put it in the title of a lecture in Vienna in 1978, public choice may be summarised by the three-word description, ‘politics without romance’.

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