ECO 481:Public Choice Theory

The Idealized The Idealized

StateState

Dr. Dennis Foster

““Poli Sci” view of Poli Sci” view of Gov’t.Gov’t.

Benign & Fair:Benign & Fair:• Participatory democracy.

• Motivation to act in the public interest.

• Political agents are balancing competing claims

– And, achieving an optimal outcome!?

• Political participation is inspiring.– Is it religious?

• At least at local level this seems true.– Or, is it? Bell example.

Visions of the Visions of the PolityPolity

Pluralism:Pluralism:

• We are not governed by “common” men.

• Promote competition of political interests.

• Federalist #10 and factions.

Visions of the Visions of the PolityPolity

Pluralism:Pluralism:

• We are not governed by “common” men.

• Promote competition of political interests.

• Federalist #10 and factions.

• Dahl: “Because one center of power is set against another, power itself will be tamed, civilized, controlled and limited to decent human purposes, while coercion, the most evil form of power, will be reduced to a minimum.”

• (Truman) Gov’t shouldn’t be judged by efficiency; other criteria here.

– What, then? Stability/equality/citizen control?

Other Visions of the Other Visions of the PolityPolity

Elitism:Elitism:

• Upper socioeconomic status.

• Want to preserve the system.

• May not rule directly - politicians as “agents.”– People have illusion of control.

– Soros & Koch versus Kennedy & Bush.

• Are they concerned with overcoming market failure?

Countervailing power:Countervailing power:• JKG - need large gov’t to offset corps. &

unions.

Scientific Scientific ManagementManagement

• Rise of “public administration.”

• Scientific research will show us the way.– Determining what people want.

– Determining what people should want!

• The rise of the regulatory state.– Internet, sugar & fat & salt, toys, DDT.

• “Satisficing” outcomes.

• Hayek critique - the worst get on top.– MMS case. --The GSA.

The Idealized The Idealized StateState

• State planning requires depoliticizing decisions.

• Gov’t planning to make “good markets.”

– Is it really market failure that pre-existing conditions don’t (usually) get covered by insurance?

• Economic growth makes us poorer (!)

– Erlich vs. Simon bet.

– Competitive economy generates winners and losers.

• Need for centralized information to create policy.

– DDT? Global Warming?

DDT Resources

• Not Evil, Just Wrong

• Stossel

• WHO World Malaria Day

• Pesticide Action Network

• What the World Needs Now Is DDT

• DDT Fraud and Tragedy

What is What is missing?missing?

““Those who argue that market failure Those who argue that market failure justi-fies government action don’t stop to justi-fies government action don’t stop to ask: ask: What incentives exist in What incentives exist in government? government?

Who wins and who loses? Who wins and who loses?

Are the actual outcomes different Are the actual outcomes different from those we hope for? from those we hope for?

Do good intentions in government produce Do good intentions in government produce good results?”good results?”

ECO 481:Public Choice Theory

The Idealized The Idealized

StateState

Dr. Dennis Foster

Federalist #10

James Madison

[A] faction … are united and actuated by some common impulse [A] faction … are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.or to the permanent and aggregate interests of the community.

There are two methods of curing the mischiefs of faction: the There are two methods of curing the mischiefs of faction: the one, by removing its causes; the other, by controlling its effects.one, by removing its causes; the other, by controlling its effects.

[T]he causes of faction cannot be removed, and that relief is only [T]he causes of faction cannot be removed, and that relief is only to be sought in the means of controlling its effects.to be sought in the means of controlling its effects.

If the impulse and the opportunity be suffered to coincide, we If the impulse and the opportunity be suffered to coincide, we well know that neither moral nor religious motives can be relied well know that neither moral nor religious motives can be relied on as an adequate control.on as an adequate control.

Federalist #10

James Madison[D]emocracies have ever been spectacles of turbulence and [D]emocracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal contention; have ever been found incompatible with personal security or the rights of property; and have in general been as security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths.short in their lives as they have been violent in their deaths.

A republic … promises the cure for which we are seeking.A republic … promises the cure for which we are seeking.

[T]he same advantage which a republic has over a democracy, in [T]he same advantage which a republic has over a democracy, in controlling the effects of faction, is enjoyed by a large over a controlling the effects of faction, is enjoyed by a large over a small republic; -- is enjoyed by the Union over the States small republic; -- is enjoyed by the Union over the States composing it.composing it.

The federal Constitution forms a happy combination in this The federal Constitution forms a happy combination in this respect; the great and aggregate interests being referred to the respect; the great and aggregate interests being referred to the national, the local and particular to the State legislatures.national, the local and particular to the State legislatures.