Government by the Market: The Politics of Public Choice
. By Peter Self. Boulder & San Francisco: Westview
Press, 1993. 303 p. $48.50 ©, $18.95 (p).
In this interesting, provocative, and troubling book, Peter Self
seeks to find a common explanation for disparate political and
policy events-the election of Ronald Reagan in 1980 in the U.S.;
the election of Margaret Thatcher several years earlier in Britain;
the attempt to reinvent government at local, state, and national
levels; tax revolts, balanced budget amendments, and term limitations-through
the application of economic reasoning to politics-or what has
commonly become known as public choice theory. Self's book begins
with a review of the intellectual history of public choice theory-particularly
useful since it is written in non-technical terms, making it a
good introduction to the field for the non-economist-but the meat
of the book is an analysis of how public choice theory has been
used to address a variety of policy questions for the last twenty
or so years.
The application of rational models to political events began in
earnest in the 1950s with the seminal works by Tiebout (1956),
Downs (1957), and Buchanan and Tullock (1962). Such works begin
with the concept of self interest and seek to explain political
results on the basis of goal maximizing individuals rationally
pursuing their own self interest. It is only a short step from
this formulation to one which recognizes that government itself
is an actor who rationally pursues its own self interest often
in competition with the remainder of society. It is the combination
of these public choice arguments with economic theories of the
market that Self sees as being "... converted into a powerful
new ideology which has become politically dominant over the last
two decades" (p.56).
In the last five chapters of the book, Self shows how this "new
ideology" has been used to justify privatizing different
governmental activities (welfare, Health care, other public services),
while attempting to reduce the size of government bureaucracy,
decentralizing government. These chapters are a mixed bag; in
part they represent a review and critique of the policies themselves,
and in part they also represent a critique of the public choice
theory behind the policy. So, the chapter on downsizing bureaucracy
discusses, on the one hand, why governments in Britain, the U.S.,
and New Zealand have all tried to reduce the size of bureaucracy
while also not agreeing that this is necessarily a wise policy,
while on the other hand discussing the strengths and flaws of
various public choice theories which typically view bureaucrats
as budget-maximizing rationalists.
Self's book is also troubling. In part that trouble comes from
his view that public choice theory has become an ideology. While
his argument that it is an acceptance of the tenets of public
choice theory on the part of elites and masses that explains much
of the political and policy events detailed at the beginning of
this review, one can also find that explanation in such non-rational
ideas as decreasing trust in government, perceived disastrous
policy effects, and the changing demographics of the American
public. From a policy perspective, non-rational theories of policy-making-such
Kingdon's (1984) use of garbage can model-can go a long way toward
explaining current U.S. policy towards a variety of issues.
In many ways, Self's argument in this book casts him as public
choice theory's institutional critic. His arguments, while valid,
assume a public choice approach to the topic and by doing so,
he opens himself to Robert Abelson's ("Social Psychology's
Rational Man", 1975) criticism that the concept of rationality
is "too prescriptive, too presumptive, and too preemptive"
(p.58). In an era where grand theory is virtually extinct, public
choice theory makes the argument that it alone can explain all
governmental behavior. While Self criticizes the shortcomings
of public choice theory he tacitly accepts its claims-that a full
understanding of governmental action is understandable only from
a rational perspective.
And last, at the risk of sounding completely chauvinistic, am
I the only American who finds his reading of a work slowed immeasurably
when that work is written in British English?
Carmine Scavo
East Carolina University