Abstract
Public choice uses economic methods to analyze government decision-making. Buchanan’s constitutional project has the normative goal of discovering constitutional rules and institutions that empower government to protect individual rights, but that constrain government from violating people’s rights. He relies heavily on hypothetical models of unanimous agreement as a benchmark for evaluating constitutional rules, but with a limited analysis of the political processes that might secure a consensus. A promising avenue for advancing Buchanan’s constitutional project is to more explicitly apply public choice analysis to it—that is, to apply economic analysis to the actual political processes that produce constitutional rules.
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Notes
- 1.
This statement is taken from www.nobelprize.org/nobel_prizes/economics/laureates/1986, “The Official Web Site of the Nobel Prize.”
- 2.
Buchanan (1965) illustrates the benefits of collective action in his exposition of a theory of clubs. While the paper refers to clubs, its framework easily extends to governments and provides one rationale for a federal system of government, because the optimal “club” size for different collectively provided goods will be different.
- 3.
Individuals might agree to be coerced, following Hochman and Rodgers (1969). Their argument is that everyone might be better off if everyone is forced to abide by the same rules.
- 4.
Note, however, that despite Buchanan ’s depiction of politics as exchange and the parallels he notes between political exchange and market exchange, Buchanan (1954) also notes significant differences between resource allocation in markets versus government.
- 5.
Formal rules are those that apply third-party sanctions when they are violated, as for example when government fines or jails rule violators. Informal rules govern interpersonal interactions through customs, habits, or agreements without third-party sanctions. See Williamson (2000) for a good discussion of formal and informal institutions.
- 6.
- 7.
Buchanan (1962a) also discusses external political costs as the costs that majority rule decision-making imposes on the minority.
- 8.
People might agree to policies that make them worse off if they inaccurately forecast the results of those policies. It is easy to imagine situations in which after the fact, people would say “If I knew that this would be the result, I never would have agreed.” Buchanan ’s hypothetical unanimous agreement rules this out by assuming people know their own interests.
- 9.
The assumption of an omniscient benevolent despot often is made explicitly, however, in the form of “the planner’s problem.” The planner is assumed to have all the information in the model, and is assumed to be willing and able to implement an optimal solution.
- 10.
Buchanan and Devletoglou (1970) object to student protests of the 1960s that opposed the Vietnam war and the military draft, and that opposed racial segregation. One might argue that they were assembling to petition their government to redress their grievances, or in Buchanan ’s (1975a) terms, arguing that those things they were protesting were injustices that would not be a part of a social contract renegotiated from anarchy. Similarly, Buchanan and Wagner (1977) argue that a balanced budget rule has been a part of the implied social contract that, now that it is routinely violated, should be added to the written Constitution; yet the actual political process routinely agrees to deficit finance.
- 11.
This was changed by the 17th Amendment, ratified in 1913, which mandated direct citizen voting for Senators.
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Holcombe, R.G. (2018). A Public Choice Analysis of James M. Buchanan’s Constitutional Project. In: Wagner, R. (eds) James M. Buchanan. Remaking Economics: Eminent Post-War Economists. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-03080-3_26
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