Can there be an agentic public choice theory?

This article by Randall Holcombe suggests that “the public chocie revolution has been stopped short of total victory” “because the lessons of public choice are ignored by policy makers and academicians, who too often argue that government will pursue the optimal policy even when there is insufficient information to find it, and when policy makers do not have the incentive to implement it even if they know what it is.” The way in which this is wrong clarifies something for me.

I hereby call on some libertarian-sympathetic graduate student who is smarter than I am to undertake an Arendtian critique of public choice theory– not as being predictively false, but as being the kind of third-person behavioralism that it makes no sense to think about agents adopting in a first-person way.

  • I feel like I want to write your wanted critique, but I don’t actually understand your hunch. The behavioral assumptions of standard economics amounts to a “kind of third-person behavioralism that it makes no sense to think about agents adopting in a first-person way.” No? What I’m not seeing is what you take the upshot of a critique of this to be, if not that rat choice/pub choice assumptions generate tons of false predictions, which they do.  

  • But standard economics (normally, openly) only claims a third-person standpoint.  It wouldn’t make sense to ask of basic microeconomics “why haven’t consumers and business people come to understand themselves as rational welfare maximizers?”  

    The question Randall is asking about public choice is that kind of question: why haven’t the people whose official role is to make policy come to understand themselves as passive participants in the policy-making process bounced around like billiard balls by the incentives others create for them?”

    • Ah! Got it. One thing to say to Randy is that the fact he thinks policymakers *can* adopt PC, and change their behavior thereby, shows that he doesn’t really believe it himself.

    • Brandon Turner

      Might we say the same thing for partisans in a Bolingbrokeian party system?

      • I see what you’re getting at, but I think the answer is “not quite.”  I think the first-person mindset Rosenblum describes is stable; one can contest vigorously while still understanding that there’s a system that depends on opposition.

    • I don’t think public choice theory should be interpreted deterministically. I think it is better (more realistic) to see it as identifying the sorts of ‘forces’ that are in play and to which any agent will be subject. But the agent is himself a ‘force’ which can make a difference. And one important way of making a difference is with ideas. As Hume said, politicians are constrained by public opinion; but public opinion is the product of ideas. An effective politician or policy-wonk can use familiar ideas in new ways to change a situation; he can also draw on new ideas and attempt to make them publicly acceptable; he might even have some new ideas of his own.

      Lots of (though not enough) people involved in public life are familiar with pubic choice theory, often in a second-hand or third-hand form. I think it enables them to be more effective because it gives them a more realistic picture of their environment; but it only enables them – the real work is down to them.

      I’m not sure how relevant this is to your problem.

  • dL

    public choice is the rent-seeking of political competition modeled by the Tullock rent-seeking game. The Standard model is that political competition dissipates rents. The Tullock model is that competition may over-dissipate rents. The empirical observation is that competition does not dissipate rents. This thus gives us a model of the State as  “the firm.” So, I would recommend de Jasay’s classic, The State, regarding the rational choice model of the State as a firm(maximizing discretionary power).

    Levy’s attempt to turn this into a philosophical question of free will is nonsense. People don’t compose sonnets at “the market,” Jacob. What do they do at the market should be a rhetorical question.

    • I’ve read The State and think highly of it.  I don’t at all see that it helps with the question at hand.

      • dL

        i disagree. I think the State as a Firm pretty much provides a solid answer to your question.

  • Maybe it works only for constitutional designers who don’t expect to be major decisionmakers within the system.

    In other words, for Lycurgus, Solon, and Rousseau’s Legislator.  Oh, and Egeria.   

    • j_m_h

      There was an article in JPE in the mid-90s on that theme. I think it was by Daniel Sutter.

  • Johnthrasher23

    I am interested in the same thing, but I am sure that Buchanan presents a version of this somewhere, I just can’t remember where. The way to go would be to model political competition evolutionarily. The idea is not that people necessarily respond to incentives in a first-person way, but that people who disregard institutional incentives are weeded out of these system at each stage. So, by the time you get to the higher levels, the behavioral tendencies that have survived are those roughly consistent with public choice theory. Furthermore, the younger people at the lower levels who are looking to succeed will tend to imitate the successful. It seems, then, that you could generate a standard evolutionary model where successful behavior (surviving elections, etc.) replicates or at least is not eliminated and also a social evolutionary model where other agents in the system tend to imitate the more successful. I suspect if you did that, the results would be that behavior tends to fall in line with incentives over time. 

  • Bill Woolsey

    I’m a Virginia School politician.  

    One message is that promoting sound policy is an uphill climb.

    The other is that real change should be constitutional.   If somehow things work up so enough folks have climbed the hill, change the consitution so that the ambitious politicians will do less harm than good.

    That is unlikely to happen.  

    However, to agree with much of the spirit of the criticisms here, I might say that the biggest effectd of “public choice” economics is to slightly reduce voter turnout.   That is, many free market economists refuse to vote.   Since there are few economists and fewer free market ones, that is only a small effect.

  • j_m_h

    “The way in which this is wrong clarifies something for me.”

    I seem to have missed where you explained the “way in which” Holcombe was wrong.

  • Todd Seavey

    It seems to me that it _is_ very much like economics, evolutionary psychology, or psychology-in-general, in that people _could_ adopt it as a first-person perspective, it’s just very unclear what the result would be.  As with all of these modes of thought, it might make them question their own motives and thus improve their behavior, alter their expectations of _others’_ behavior and thus enable them to produce better-coordinated results, or just turn them “more Machiavellian,” loosely speaking.  

    Because of this, I’m not even sure how you’d gauge public-sector awareness of public choice aside from just asking them if they think about it.  But none of these modes of thought seem to require people to be either oblivious or fatalistic (likewise, I can know I have monkey-impulses and either react with delighted self-rationalization, guilty self-restraint, or the sort of indifference with which one thinks “So _that’s_ how much nitrogen is in me!”).  

    On balance, though, you’d think all these modes, including public choice, would tend to produce some beneficial “disillusionment” of the sort that produces more accurate expectations (which a Straussian type might argue is not enough of a net benefit to offset the loss of illusory narratives about heroic public service or something, but that’s not a paradox like the one that seems to be worrying Jacob, just a cost-benefit question).

  • Todd Seavey

    (Of course, I may end up saying _almost_ the same thing as Jacob, in that Holcombe assumes awareness = victory, whereas I’d say it’s not _entirely_ clear awareness = better behavior.  Awareness is surely _possible_, though.)

  • Todd Seavey

    P.S. Slightly interesting aside: As you may know, Jeffrey Friedman of _Critical Review_ doesn’t believe public choice theory (just to complicate things) and thinks bureaucrats and voters tend to be as much or more motivated by their pictures of how the world should be as by a desire to increase either their office furniture or the goodies in their districts.  I can’t pretend to have gathered stats, but it sure seems to me as if people’s pictures of how the world should be — absent a strong contrary ideological impulse — have an uncanny tendency to augment their office furniture and goodies to their districts, though.

  • Mark LeBar

    Jacob, can you say a bit more about what you are thinking? I’m reading you as suggesting that a theory of human behavior can’t be descriptively accurate if it cannot be accepted as a theory guiding deliberation in a first-person deliberative position. But that can’t be right, so I’m somewhat confused as to what your thought is here.

    • Well, at a minimum, a theory like that *can’t be accepted as a theory guiding deliberation in a first-person deliberative position,* which is precisely what Randy’s calling for.  

      • Mark LeBar

        Actually, I don’t see that. It’s compatible with thinking that public choice theory is true of political institutions, and should shape our thinking about them (which I take it is his thesis), that I do not see myself in doing so as being shaped by the pressures the theory stipulates. That seems like a common configuration of theories and normative guidance.

  • Heartily second that call, although I’m agnostic regarding the degree of libertarian-sympathy.

  • sigaba

    What makes you think a libertarian read of this problem is “Arendtian”?  Public choice theory actually seems to fit in with Hannah Arendt’s story of state legitimacy versus force.  Efficient public choice is realized by state power — even if the state makes a sub-optimal decision, individuals align themselves with the state.

    That’s what power is, in her telling: the phenomenon of all the citizens of a state acting in concert toward a shared, common goal.

    Libertarianism admits common action will occur among individuals, but it draws a bright line around the State being a player in that, because libertarians generally believe State authority is based on violence.  Arendt specifically picked that rule apart.