Public Choice Approach Theorists

Public Choice Approach

Gordon Tullock- He published a book in 1965 called as ‘Politics of Bureaucracy’. This was the first book on Public Choice explaining the failure of welfare state and public bureaucracy. It also provided an explanation regarding the viability of the state. His arguments are based on three major assumptions.

a.       Individual by nature is rational and thereby, is self-seeking- The individual remains rational everywhere, both in the public as well as the private sector. The individual’s action is directed towards maximizing his/her self-interest.

This view is contrary to the traditional theory of politics explaining the man within the state or the administration. The traditional theory takes a universal or idealistic view of the man. The essential character of man is considered from political or administrative idealism. Individual is considered to be benevolent and oriented towards public interest.

Tullock rejected this view and said that individuals within the organization are individualistic and self-oriented. Thus, Tullock while rejecting political idealism has accepted political egoism.

Virginian School of Public Choice emphasizes that individual is rational and thereby, remains rational not only in the market place but also in the arena of politics and administration.

b.      The public sector is not constrained by the disciplining power of competition- This has been explained through a concept called as Catallactics. It is also known as Politics as exchange. Tullock says that individuals within the bureaucracy are utility-maximizers. Their primary interest is to rise in the organizational hierarchy by getting promotions because it results into power, prestige and comfort. Tullock also says that Public sector under Welfarism operates in an environment of monopoly unlike the private sector which operates in an environment of competition and each of these private sector organizations have to compete with each other in order to secure and promote their revenue. Thereby, these organizations are under a constant pressure to perform. If they do not perform, they will become uncompetitive and lose revenue. Any decrease in performance or mal-performance will make these organizations invalid. Thus, in the private sector, the overall emphasis is on performance.

On the other hand, the public bureaucracy under Welfarism operates in an environment of monopoly. The public sector organizations are not under the pressure to earn revenue through their performance as they are being supported by the public budget. Thereby, these organizations can remain non-performers and still continue for long because the disciplining power of competition does not apply to these public sector organizations. Thus, performance is not a valued criterion in these organizations.

c.       There is no objective performance measurement system in the public sector- Tullock says that in private profit organizations, the individual’s self-interest is linked to the organizational goal. Whereas in the public sector, such linkage is not established. On the other hand, in the public organization, there is no linkage between the individual’s goal and the organizational goal. This is because in the private profit organization, the individual’s benefits are contingent upon the fulfilment of the organizational goal. The individual’s benefit is dependent on the individual’s performance. This linkage is established through the objective performance measurement system. In private sector, the targets as well the performance measurement system, both are objective. This helps in objectively differentiating between the performers and the non-performers. Thus, not only the organization is under a pressure to perform but also the individual are under a pressure to perform. Thus, economic methods are being used to study the variables of politics and administration.

Anthony Downs- He published a book in 1967 called as ‘Inside Bureaucracy’. While trying to provide an argument on the failure of public bureaucracy under the welfare state, he also included the arguments which were provided by Tullock. In addition to that, he came out with certain other arguments explaining the failure of bureaucracy. He said that the private organizations operate on the basis of market for output i.e. the market organization’s expenditure and expansion depends on the financial viability of their activities. Market for output becomes a natural check against the organization become over-sized. On the contrary, the public organizations under Welfarism are not based on market for output since they are provided with the necessary budgetary support. Thus, public sector organizations go on to become over-sized organizations. These organizations, in terms of size become very large. Being over-sized, they suffer from the law of diminishing control and the law of diminishing co-ordination.

William Niskanen- He published a book in 1971 called as ‘Bureaucracy and Representative Government’. He also provided a Public Choice Approach in explaining the failure of bureaucracy. He has also put some points similar to that of Tullock. But, he also came out with some original arguments in this regard. In public bureaucracy, the individual lacks in motivation to perform as the output of lack of performance is not shared with the individual and as well the output of performance is also not shared with the individual. In the public sector, there is no fear of loss of performance as well as there is no incentive for higher performance. In public bureaucracy, the efficiency savings does not accrue to the individual.