implications of his arguments for the public sector, and often supplied government
with policy advice based on his intellectual labors (Buchholtz , –).
Though rational choice’s basic intellectual toolkit is centuries old, students of
public administration largely ignored it until relatively recently. Public administration
was intellectually cross-fertilized with business-oriented disciplines such
as management and organization theory as early as the late nineteenth century,
but it was another half century before economists began transferring the formal
theories of their home discipline to politics. With Anthony Downs’s An Economic
Theory of Democracy (), and James Buchanan and Gordon Tullock’s The Calculus
of Consent (), the implications of economic theory for the public sector
could be ignored no longer. These works presented an immediate challenge to orthodox
thinking in public administration and political science (Buchanan and
Tullock’s work is widely considered to mark the formal founding of rational choice
theory). The key characteristic separating these works from traditional approaches
to political and public administration theory was their emphasis on the rational,
self-interested actor. In these frameworks, the public-spirited citizen and the neutrally
competent public servant were replaced with the rational utility maximizer.
Following Smith’s lead, citizens and civil servants in these frameworks were not
presumed to engage in political behavior because of civic ideals or commitment
to the common good; instead, it was assumed they engaged in political behavior
for the same reasons they engaged in economic behavior, namely, they were motivated
by a desire to benefit themselves.
Rational choice theory is thus anchored to the belief that the central behavioral
assumption of the neoclassical economic paradigm is universal: Self-interest drives
our decisions and actions, whether these are purchasing a car, voting, or formulating
a public budget. From this starting point, it is a short step to the notion of
markets for public services, a situation where citizen-consumers shop for the public
goods and services they most prefer, and producers of these services are competitive
organizations whose self-interest is coupled to the need for efficient
response to consumer demand. This, needless to say, contradicts orthodox public
administration notions of who should provide public services and how: bureaucracies
in centralized jurisdictions that are responsive to representative democratic
institutions rather than consumer demand.
This large-scale challenge to traditional thinking in public administration is
fashioned from remarkably simple theoretical tools. As outlined by Buchanan and
Tullock, there are only two key assumptions of rational choice theory. () The average
individual is a self-interested utility maximizer. This means an individual
knows her preferences or goals, can rank-order them, and when faced with a set
of options to achieve those preferences will choose those expected to maximize
individual benefits and minimize individual costs. This preferred mix of benefits
implications of his arguments for the public sector, and often supplied government
with policy advice based on his intellectual labors (Buchholtz , –).
Though rational choice’s basic intellectual toolkit is centuries old, students of
public administration largely ignored it until relatively recently. Public administration
was intellectually cross-fertilized with business-oriented disciplines such
as management and organization theory as early as the late nineteenth century,
but it was another half century before economists began transferring the formal
theories of their home discipline to politics. With Anthony Downs’s An Economic
Theory of Democracy (), and James Buchanan and Gordon Tullock’s The Calculus
of Consent (), the implications of economic theory for the public sector
could be ignored no longer. These works presented an immediate challenge to orthodox
thinking in public administration and political science (Buchanan and
Tullock’s work is widely considered to mark the formal founding of rational choice
theory). The key characteristic separating these works from traditional approaches
to political and public administration theory was their emphasis on the rational,
self-interested actor. In these frameworks, the public-spirited citizen and the neutrally
competent public servant were replaced with the rational utility maximizer.
Following Smith’s lead, citizens and civil servants in these frameworks were not
presumed to engage in political behavior because of civic ideals or commitment
to the common good; instead, it was assumed they engaged in political behavior
for the same reasons they engaged in economic behavior, namely, they were motivated
by a desire to benefit themselves.
Rational choice theory is thus anchored to the belief that the central behavioral
assumption of the neoclassical economic paradigm is universal: Self-interest drives
our decisions and actions, whether these are purchasing a car, voting, or formulating
a public budget. From this starting point, it is a short step to the notion of
markets for public services, a situation where citizen-consumers shop for the public
goods and services they most prefer, and producers of these services are competitive
organizations whose self-interest is coupled to the need for efficient
response to consumer demand. This, needless to say, contradicts orthodox public
administration notions of who should provide public services and how: bureaucracies
in centralized jurisdictions that are responsive to representative democratic
institutions rather than consumer demand.
This large-scale challenge to traditional thinking in public administration is
fashioned from remarkably simple theoretical tools. As outlined by Buchanan and
Tullock, there are only two key assumptions of rational choice theory. () The average
individual is a self-interested utility maximizer. This means an individual
knows her preferences or goals, can rank-order them, and when faced with a set
of options to achieve those preferences will choose those expected to maximize
individual benefits and minimize individual costs. This preferred mix of benefits
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