Public choice is a theory that attempts to explain how authorities make political decisions seeking their benefit personal. This, instead of optimizing the wellness common.
This means that the rulers act based on individual interest. This, instead of maximizing the benefit of its represented.
The theory of public choice allows us to better understand how public policy decisions are formed. That way, agents can develop more accurate predictions.
Origin of the theory of public choice
The theory of public choice was initially developed by James M. Buchanan. Its objective was to refute the assumption that politicians act for the benefit of their constituents. Thus, he analyzed the variables or incentives that influence the decisions of the authorities.
It should be noted that Buchanan won the Nobel Prize in Economics in 1986 for his contributions to the theory of public choice.
Characteristics of the theory of public choice
Among the characteristics of the public election are:
- Part of methodological individualism, that is, the individual becomes the relevant unit of analysis.
- It is also known as “politics without the romance novel.”
- It is related, within the scope of public policies, to the theory of social choice. This is a mathematical approach that attempts to explain how individual interest affects the decision of the voter.
- Buchanan noted that the consequences of public policies must be assumed by all citizens, and not only by the authorities.
- To what is indicated in the previous point, it is added that the public funds belong to all taxpayers. Therefore, according to Buchanan, citizens should have access to legal mechanisms that allow them to monitor the decisions of their rulers.
Contrast with private choice
The theory of public choice allows us to observe how it differs from private choice. In the latter case, the decision affects only the individual or entity that makes it. For example, let’s imagine that a person buys a car. This decision is voluntary and the seller must accept the conditions of the transaction.
However, in public policy decisions, all taxpayers bear the costs. For example, suppose the government announces the construction of a new road. Then, it carries out a contest and delivers the concession to a company that, to finance part of the work, imposes the payment of a toll.
In the previous example, we can see how a public policy decision, which surely had the support of a sector of the population, affected, in general, all citizens on the road to be renewed.