"Public choice, or public choice theory, is 'the use of economic tools to deal with traditional problems of political science'. Its content includes the study of political behavior."
Real-world applications of public choice theory in fields such as health care, education, and environmental policy.
The origins of public choice theory: This topic looks at the historical background of public choice theory and the thinkers who contributed to its development.
Rational choice theory: This concept forms the theoretical foundation of public choice theory and explores how individuals make decisions in their self-interest.
Collective action problem: This is a scenario where individuals act in their self-interest, disregarding the welfare of the group.
Public goods: Non-excludable, non-rivalrous goods that anyone can enjoy, regardless of contribution. They are problematic for public choice discussions.
Principal-agent problem: This problem arises from the distance between a principal (like a voter) and an agent (like a politician) that is supposed to represent their interests and execute their wishes.
Rent-seeking: This is the pursuit of profits outside of a free market by seeking to manipulate the political process.
Voting behaviors: This topic focuses on how voters decide whom to vote for and how their preferences are formed.
Special interest groups: These groups lobby public officials in their interest, potentially creating inequitable distribution of power and resources.
Constitutional limits: This incorporates the study of legal and institutional boundaries that constrain government actors in public choice decision making.
Elected officials and Bureaucrats: This topic focuses on the incentive structures that motivate the behaviors of the two groups that make public policy decisions.
Public choice models: Techniques used to analyze and model public choice decision making.
Institutional analysis: The study of institutions in their capacity to shape political and economic outcomes, as informed by public choice theory.
Public sector entrepreneurship: This is the use of public sector resources by entrepreneurs to create wealth or value for society, thereby approaching policy innovation from a market-oriented lens.
Voting: It is the most common application of public choice theory. It involves collective decision-making where the voters choose the best representative to make decisions on their behalf.
Bureaucracy: It deals with the incentives that drive the behavior of public officials. Public Choice theory evaluates how bureaucrats' interests can be aligned with societal interests.
Rent Seeking: It refers to seeking benefits or privileges by manipulating the market or the government. Public Choice theory identifies the factors that influence rent-seeking behavior and their impact on the economy.
Regulation: It evaluates the impact of government policies on market behavior. It examines how regulations affect incentives at the industry level, and how they can be manipulated by interest groups.
Public Goods: It involves the provision of goods and services that are not available in the market. Public Choice theory examines the incentives that drive public goods production and how they can be influenced by special interest groups.
Taxation: It studies the effects of taxation policies on behavior. Public Choice theory examines how taxation policies can be manipulated to benefit certain groups at the expense of others.
Political Advertising: It studies the effects of political advertising on voter behavior. Public Choice theory examines how political advertising can influence voters' preferences and how politicians can manipulate the media to their advantage.
Game Theory: It is a mathematical model used to analyze strategic decision-making. Public Choice theory uses game theory to analyze the strategies of players in a political or economic game.
Market Failures: It examines the limitations of the market to allocate resources efficiently. Public Choice theory identifies different types of market failures and how they can be remedied by public policies.
Externalities: These are unintended consequences of economic activities. Public Choice theory examines the impact of externalities on the public and how they can be addressed by public policies.
"It is the subset of positive political theory that studies self-interested 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."
"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' in this space."
"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 can be influenced by their own perceived self-interest when making decisions in their official roles."
"Public choice theory is also closely related to social choice theory, a mathematical approach to the aggregation of individual interests, welfare, or votes."
"Public choice analysis has roots in positive analysis ('what is') but is often used for normative purposes ('what ought to be') in order to identify a problem or to suggest improvements to constitutional rules."
"Rather, decisions are made by the combined choices of the individuals."
"The second is the use of markets in the political system, which was argued to be a return to true economics."
"The final is the self-interested nature of all individuals within the political system."
"As Buchanan and Tullock argued, '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'."