But as Buchanan and Gordon Tullock argue, "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.
"[9] A 19th-century precursor of modern public choice theory was the work of Swedish economist Knut Wicksell,[10] which treated government as political exchange, a quid pro quo, in formulating a benefit principle linking taxes and expenditures.
[11] American statesman and political theorist John C. Calhoun is also seen as a precursor to modern public choice theory.
[19] Among other important works are Anthony Downs's An Economic Theory of Democracy (1957) and Mancur Olson's The Logic of Collective Action (1965),[20] which was fundamental in beginning the study of special interests.
But its methodology, conceptual apparatus, and analytics "are derived, essentially, from the discipline that has as its subject the economic organization of such a society".
The consent takes the form of a compensation principle like Pareto efficiency for making a policy change and unanimity or at least no opposition as a point of departure for social choice.
Although some work has been done on anarchy, autocracy, revolution, and even war, most study in this area is concerned with the fundamental problem of collectively choosing constitutional rules.
The usual model depicts top bureaucrats as chosen by the chief executive and legislature, depending on whether the democratic system is presidential or parliamentary.
[13] The anthropological study of bureaucracy has mostly contributed to our understanding of how various institutions of governance operate, why they achieve the outcomes they do, and what their work cultures are.
A focus has also been placed on non-state welfare and humanitarian organisations, ranging in size from tiny NGOs to significant supranational institutions like the United Nations.
[28] According to Geoffrey Brennan and Loren Lomasky, democratic policy is biased to favor "expressive interests" and neglect practical and utilitarian considerations.
In articles in Econ Journal Watch, economist Bryan Caplan contended that voter choices and government economic decisions are inherently irrational.
Countering Donald Wittman's arguments in The Myth of Democratic Failure, Caplan claims that politics is biased in favor of irrational beliefs.
Anyone who derives utility from potentially irrational policies like protectionism can receive private benefits while imposing the costs of such beliefs on the general public.
If people bore the full costs of their "irrational beliefs" they would lobby for them optimally, taking into account both their instrumental consequences and their expressive appeal.
Caplan defines rationality mainly in terms of mainstream price theory, arguing that mainstream economists oppose protectionism and government regulation more than the general population, and that more educated people are closer to economists on this score, even after controlling for confounding factors such as income, wealth or political affiliation.
As Sam Peltzman puts it: Economists know what steps would improve the efficiency of HSE [health, safety, and environmental] regulation, and they have not been bashful advocates of them.
[31]Public choice's application to government regulation was developed by George Stigler (1971) and Sam Peltzman (1976).
It may make them feel powerful and important, and can also benefit them financially by opening the door to future wealth as lobbyists.
In his article on interest groups, Gary Becker identifies this countervailing force as the deadweight loss from predation.
Even if the public could evaluate policy proposals effectively, it would find it infeasible to engage in collective action in order to defend its diffuse interest.
Rent-seeking is broader than public choice in that it applies to autocracies as well as democracies and therefore is not directly concerned with collective decision-making.
But public choice theory must account for the obvious pressure rent-seeking exerts on legislators, executives, bureaucrats, and even judges when analyzing collective decision-making rules and institutions.
Gordon Tullock, Jagdish Bhagwati, and Anne Osborn Krueger have argued that rent-seeking has caused considerable waste.
[35] The British journalist Alistair Cooke, commenting on the Nobel Memorial Prize awarded to James M. Buchanan in 1986, reportedly summarized the public choice view of politicians by saying, "Public choice embodies the homely but important truth that politicians are, after all, no less selfish than the rest of us.
"[36] Several notable public choice scholars have been awarded the Nobel Prize in Economics, including Kenneth Arrow (1972), James M. Buchanan (1986), George Stigler (1982), Gary Becker (1992), Amartya Sen (1998), Vernon Smith (2002), and Elinor Ostrom (2009).
[39] These include why politicians vote against their constituents' interests, why they advocate for higher taxation, fewer benefits, and smaller government, and why wealthy people seek office.
[38] Pressman is not alone in his critique; other prominent public choice economists, including Anthony Downs in An Economic Theory of Democracy,[41] Morris P. Fiorina,[42] and Gordon Tullock[43] recognize that theorizing voting behavior is a major hurdle for the public choice approach.