Public Choice Theory

I argue that much current thinking on externalities—at least among “lay political economists” (but even, on occasion, among professional economists)—is saddled with two analytical errors. The first is what I call coextensivism: the conflation of public goods and externalities. The second error is what I call externality profligacy: the conflation of economic and “social” externalities. The principal dangers presented by these two “dogmas on externalities” are that, while in their grips, we are under-disposed to seek negotiated, market-based solutions (of a (...) broadly Coasean nature) to challenges posed by economic externalities, and over-disposed to seek coercive, state-based solutions (of a broadly Pigouvian nature) to challenges posed by social externalities. (shrink)

O Judiciário moderno constitui um sistema hierarquizado e centralizado, em que cortes superiores, com um número pequeno de membros, têm a função de “dar a última palavra” para resolver desacordos doutrinários entre instâncias inferiores – e inclusive rever decisões das demais autoridades. Essa estrutura hierárquica implica uma fonte peculiar de instabilidade: o tribunal superior se torna como que um “ponto único de falha” suscetível à captura, à pressão indevida, à sobrecarga, e até a súbitas mudanças doutrinárias – pondo em risco (...) seu alegado papel de estabilizador do regime democrático. Isso é salientado quando tais cortes sofrem pressão, ou quando há reviravoltas decorrentes de uma maioria frágil no tribunal – a exemplo do debate sobre a prisão em segunda instância no Brasil. Analiso como o desenvolvimento tecnologias de informação e comunicação (TICs) poderia mitigar este problema por meio de um sistema que agregue decisões judiciais de instâncias inferiores a fim de resolver conflitos de jurisprudência numa determinada jurisdição; isso equivaleria a um sistema de votação que substituiria a atuação da corte de última instância na unificação de jurisprudência – como se a última instância fosse, na realidade, composta pelo judiciário como um todo. Isso alteraria a estrutura de decisão hierarquizada do judiciário, no que diz respeito a divergências entre magistrados, aumentando a descentralização do sistema – associada ao ideal da tradição de common law. Embora original, a proposta é modesta, e poderia ser atingida por meio de mudanças incrementais, sem ruptura institucional, a partir de práticas e tecnologias já existentes – e uso como exemplo ferramentas de legal analytics e o sistema de “repercussão geral de recursos extraordinários” do Brasil, no qual se utiliza processamento de linguagem natural para filtrar e classificar processos de acordo com o tema. Ao final, discutem-se possíveis vantagens e desvantagens dessa proposta, como características epistêmicas da descentralização e o risco de “rigidez” na evolução da doutrina jurídica – em especial no que se refere aos longos mandatos de membros de tribunais superiores. Concluímos que a descentralização da unificação da jurisprudência pode contribuir para mitigar o risco de, com o desenvolvimento da tecnologia, maior concentração de poder. (shrink)

During the Covid-19 pandemic, public policy was not driven by findings from public health research, but by politicians’ desire to pursue their own interests. The media and politicians inflamed mass hysteria and then imposed ill-considered lockdowns to “solve” the problem. Lockdowns not only failed to protect those at risk from the virus, but also caused enormous collateral damage. Public choice theory helps explaining this decision-making. -/- .

Proponents of the public goods argument ('PGA') seek to ground the authority of the state on its putative indispensability as a means of providing public goods. But many of the things we take to be public goods – including many of the goods commonly invoked in support of the PGA – are actually what we might term publicized goods. A publicized good is any whose ‘public’ character results only from a policy decision to make some good freely and universally available. (...) This fact poses complications for the PGA, insofar as the set of possible publicized goods is quite extensive indeed. (shrink)

To demonstrate their appreciation for the inevitability of choice on the educational landscape, the authors acknowledge: the moral and legal right of parents to choose an education they think ‘best’ for their own child; the necessity of plural educational provision in a liberal democratic society; the legitimate concerns many parents have about the quality of education on offer; and even the (not occasional) success of copious educational alternatives, which may or may not foster innovation. So far so good. But a (...) number of difficulties quickly come into view. (shrink)

The social welfare functional approach to social choice theory fails to distinguish a genuine change in individual well-beings from a merely representational change due to the use of different measurement scales. A generalization of the concept of a social welfare functional is introduced that explicitly takes account of the scales that are used to measure well-beings so as to distinguish between these two kinds of changes. This generalization of the standard theoretical framework results in a more satisfactory formulation of welfarism, (...) the doctrine that social alternatives are evaluated and socially ranked solely in terms of the well-beings of the relevant individuals. This scale-dependent form of welfarism is axiomatized using this framework. The implications of this approach for characterizing classes of social welfare orderings are also considered. (shrink)

Gary Becker´s 1956 paper about free banking was originally intended as a reaction to the 100-percent reserve proposals that were then popular at the University of Chicago. Today the original paper clearly illustrates how considerably our views and theories about free banking have evolved in the past 50 years. This development is to a considerable extent the result of the work and the writings of economists of the Austrian School. Pascal Salin is one of the most prominent members of the (...) Austrian Free Banking School. In a new introduction to the 1956 paper written especially for the Festschrift in honor of Pascal Salin, Gary Becker partly repudiates and mitigates some of his previous conclusions. This event offers a fitting opportunity to review some developments in the theory of free banking and related issues and to add a few clarifications concerning the present “state of the art” as regards an acceptable and adequate concept of free banking. (shrink)

Benefit/cost analysis is a technique for evaluating programs, procedures, and actions; it is not a moral theory. There is significant controversy over the moral justification of benefit/cost analysis. When a procedure for evaluating social policy is challenged on moral grounds, defenders frequently seek a justification by construing the procedure as the practical embodiment of a correct moral theory. This has the apparent advantage of avoiding difficult empirical questions concerning such matters as the consequences of using the procedure. So, for example, (...) defenders of benefit/cost analysis (BCA) are frequently tempted to argue that this procedurejust isthe calculation of moral Tightness – perhaps that what itmeansfor an action to be morally right is just for it to have the best benefit-to-cost ratio given the accounts of “benefit” and “cost” that BCA employs. They suggest, in defense of BCA, that they have found the moral calculus – Bentham's “unabashed arithmetic of morals.” To defend BCA in this manner is to commit oneself to one member of a family of moral theories (let us call thembenefit/cost moral theoriesorB/C moral theories) and, also, to the view that if a procedure is (so to speak) the direct implementation of a correct moral theory, then it is a justified procedure. Neither of these commitments is desirable, and so the temptation to justify BCA by direct appeal to a B/C moral theory should be resisted; it constitutes an unwarranted short cut to moral foundations – in this case, an unsound foundation. Critics of BCA are quick to point out the flaws of B/C moral theories, and to conclude that these undermine the justification of BCA. But the failure to justify BCA by a direct appeal to B/C moral theory does not show that the technique is unjustified. There is hope for BCA, even if it does not lie with B/C moral theory. (shrink)