Advanced Topics in Liberty

Public Choice and Government Failure (Fall 2010)

Discussion Leader – Mark Pennington , Queen Mary, University of London

While traditional economic theory explains the private choices of individuals in the market, traditional political science did not, until recently, analyze the behavior of individuals as they make choices. Public choice is the intersection of these two disciplines: the institutions are those of political science, and the method is that of economic theory. Public choice scholars have developed powerful critiques about the shortcomings of democratic decision-making, the dangers of government regulation, and the pathologies of bureaucracies. Perhaps no other academic revolution in the last fifty years has done more to promote the cause of liberty than the development of the Public Choice School of Economics. Led by James Buchanan and Gordon Tullock, this academic movement has done much of the intellectual legwork in recent years for friends of liberty who are concerned about the explosive growth of government during the twentieth century.

Though the work of public choice economists has been recognized as an important contribution to our understanding of how institutions in a free society work, they receive surprisingly little mention in graduate courses in political science, political philosophy, history, or even economics. Some fifty years after the publication of Calculus of Consent, the term “public choice” is still largely unknown to most people outside of academia. Part of the reason for this may be the economic language and mathematical models that dominate much of the research among public choice scholars. The goal of this conference would be to examine the evolution and main arguments of the public choice school. The readings will focus on why government does not work nearly as well as its supporters argue, why it continues to grow, and how we can think more critically about what specific roles government and markets should play in society.


Session 1:        What is the Public Choice Approach?

Buchanan, James. “Politics Without Romance,” The Collected Works of James M. Buchanan: Volume 1, The Logical Foundations of Constitutional Liberty. Indianapolis: Liberty Fund, 2001. pp. 45-59

Wittman, Donald. “The Constitution as an Optimal Social Contract and the Role of Transaction Costs in Constitutional Design,” The Myth of Democratic Failure: Why Political Institutions Are Efficient.  Chicago: University of Chicago Press, 1995. pp. 122-151

Machiavelli, Niccolo. The Prince. Translated by Harvey C. Mansfield. Chicago: University of Chicago Press, 1998.


Session 2:        Constitutions as Contracts for Liberty

Hayek, Friedrich.  “Responsibility and Freedom” & “Coercion and the State.” The Constitution of Liberty. Chicago: The University of Chicago Press, 1960.  pp. 71-84, 133-147

Buchanan, James M. and Tullock, Gordon. “A Generalized Economic Theory of Constitutions,” The Calculus of Consent:  Logical Foundations of Constitutional Democracy. Indianapolis: Liberty Fund, 1999. pp. 63-84


Session 3:        Factions, Interest Groups and Self-Interest

Carey, George W. and McClellan, James, eds. “Federalist No. 10”  The Federalist, Indianapolis: Liberty Fund, Inc., 2001. pp. 42-49

Brady, Gordon L., Seldon, Arthur, and Tullock, Gordon.”Logrolling,” & “The Cost of Rent Seeking,” Government Failure: A Primer on Public Choice. Washington: Cato Institute, 2002. pp. 29-41 & 43-51


Session 4:        Redistributive Politics and Government Failure

Stigler, George J. “The Theory of Economic Regulation.” The Bell Journal of Economics and Management Science Vol. 2, No. 1 (Spring 1971). pp.  3–21.

Wagner, Richard. “Public Spending and Income Redistribution,” To Promote the General Welfare. Pacific Research Institute, 1989.  pp. 89-106


Session 5:        Elections and the Problems with Determining What “The People” Want

Caplan, Bryan. “Classical Public Choice and the Failure of Rational Ignorance,” The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Princeton: Princeton University Press, 2007. pp. 94-113


Session 6:        Constitutional Reform as a Light at the End of the Tunnel?

Buchanan, James and Musgrave, Richard. “Constraints on Political Action,” “Response,” & “Discussion,” Public Finance and Public Choice: Two Contrasting Views of the state. Cambridge: The MIT Press, 1999. pp. 107-152