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Introduction to Public Choice Theory Public Choice Theory Politicians As Economic Agents Median Voter Theorem PPE 101 Voters As Economic Agents

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Introduction to Public Choice Theory Public Choice Theory Politicians As Economic Agents Median Voter Theorem PPE 101 Voters As Economic Agents Contents: Review Theories of Economic Justice Introduction to Public Choice Theory Public Choice Theory Politicians as Economic Agents Median Voter Theorem PPE 101 Voters as Economic Agents Utilitarianism: Utilitarianism: One that maximizes overall “utility” Maximize overall “utility” (wellbeing, Theories of (wellbeing, happiness, pleasure, etc.) Theories of happiness, pleasure, etc.) Economic Rawls: Economic Rawls: One that protects basic liberties and Protect basic liberties and allow Justice allows inequalities only insofar as Justice inequalities only insofar as they they benefit the least advantaged. What is a Just Distribution? What Should the Government benefit the least advantaged. Nozick: do? Nozick: One that results from wholly Should protect individual rights, voluntary transactions and just enforce contracts, provide protection. initial acquisitions. Introduction to Introduction to Public Choice Public Choice Theory Theory Public Choice Theory: What is it? What Moves Public Choice Theory: The application of economic Politics? methods to the study of political processes. What Moves Politics? Anthony Downs American Economist Public Choice Theory: Politicians - Every agent in the division of labor has a private motive (self-interest) and a social function (the role they play within their institution). - Politics is not exempt. - Politicians pursue private motives and, in the process (if the political institutions are designed appropriately), serve a social function that benefits others. Under perfect information, Under conditions of imperfect - Voters elect those who will information, benefit them. Public Choice Public Choice - Politicians do not know what - Government expects voters to voters want. vote based on how policies affect Theory Theory - Voters don’t know what them. politicians are doing, will do, or The Argument, Part I - The opposition offers The Argument, Part II should be doing. alternatives based on their - Information is a costly expectations of how voters will resource. vote The Economic Analysis of Government Persuasion - Voters and politicians pursue their own goals, under conditions of uncertainty Because of imperfect information, it is irrational for - Information is a costly resource. politicians to treat all citizens equally. - Giving rise to three critical elements of political life: Some citizens are more (1) Persuasion, (2) Ideology, effective at persuading others (3) Rational Ignorance to support their policies. Persuasion Ideology Because of imperfect Ideologies are crafted to win information, it is irrational for elections. politicians to treat all citizens They help voters differentiate equally. between politicians (without Some citizens are more needing to learn every policy effective at persuading others position). to support their policies. Parties invent ideologies to attract ideological voters. Ideology Ideology The Median Voter Theorem: The Median Voter Theorem: a majority rule voting system a majority rule voting system will select the outcome most will select the outcome most preferred by the median voter. preferred by the median voter. Parties will select ideologies that Polarization: are close to the “center” If the electorate is polarized, the (at least when certain conditions theorem doesn’t hold. obtain). Ideology Rational Ignorance The Median Voter Theorem: - The time and effort required to a majority rule voting system make an informed choice is high. will select the outcome most preferred by the median voter. - The likelihood that your vote will make a difference is very low. Polarization: If the electorate is polarized, the - It is rarely rational for a voter to theorem doesn’t hold. invest the time and effort required to make an informed choice. Conclusion Questions?.
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