Briefly describe the basic features of Public Choice approach.

In addition to providing insight into how public decision-making occurs today, public choice analyses the rules that guide the collective decision-making process itself. These are the constitutional rules that are made before political activity gets underway. Public Choice theorists argue against adopting an organic view of the state and society. A society is merely the collection of individuals who constitute it. Similarly, the state is not a homogeneous organic entity. It is a collection of politicians, administrators and other official and personnel.

Social Scientists should look at the structure within which political decisions are made. Before looking at the effects of alternative economic policies within a given set of rules, social scientists should analyse the structure of the state and political apparatus.

First investigate the relationship of the individual and the state; see why people come to cooperate and engage in exchange in society. Look at the ‘constitution’ of economic policy. Public Choice theorists stress in the politics-as-exchange model that in exchange, the process itself, rather than outcome, should be focussed on. There is no external authority which judges outcome to be efficient. From this arises the contractarianist view of society where a just social order arises as a result of voluntary exchange among individuals to develop a social contract. Consensus and unanimity are fundamentally important.

Public choice theorists have propounded on collective choice, or how groups in societies form collective decisions. People often feel the need to coordinate their strategies to get some potential gains or meet some objectives. Mancur Olson was one of the first to provide an insight into why collective or group action is not likely to be very successful, specially if the group size is large The basic idea that Olson put forward was that the public interest was a public good and that people would free-ride, that is, try to get benefits without incurring any cost. Since the larger the group the smaller the individual benefit, therefore the less any person is likely to volunteer or participate in the group activity needed to bring a particular objective to fruition. Hence, the smaller the group, the more likely is the group activity to succeed. Public choice theorists see the danger of special interest dominating the public interest in many spheres. In many cases, lobbies and pressure groups get organised and use the political process to garner subsidies, which are inefficient from a social point of view, at the cost of the unorganised bulk of the population. When there are public interest groups and lobbies, the outcome could not only be unfair but also pareto-suboptimal. People find it hard to come together and devise pareto-efficient solutions because public interest is a public good, and there will be an under-supply of privately produced public good. 

Subcribe on Youtube - IGNOU SERVICE

For PDF copy of Solved Assignment

WhatsApp Us - 9113311883(Paid)