Abstract
Public choice theory is an established part of general economic theory. It emerged as an offshoot of the mainstream in the 1940s and deals with applying economic methods to political analysis and decision making within political institutions. Today, the public choice approach is being used successfully in a wide spectrum of social sciences, as well as in politics at the macro- and international levels. At the theoretical level, we feel that public choice theory is of wide importance relating to the change in definition of its traditional place in economic theory. Approximately, this change began to occur during the 1980s, and it documents an interpretative shift from public choice theory being a relatively independent economic discipline to a discipline that is presented as an immanent part of the new political economy, a newly created school of opinion. This paper’s goal is to analyze and discuss the paradigmatic, historically conditioned theoretical-methodological concept of public choice by using research into the literature. Concurrently, our ambition is also to define key points of overlap that link public choice theory to the economic mainstream (neoclassical economics) on one hand and the new political economy on the other. We have developed the conclusions of this analysis and intellectual comparison into a wider discussion of public choice theory’s significance and its role in the formative process of economic theory’s development and future trajectory.
Highlights
Public choice theory has enjoyed many years of tradition within economic theory
Keynes wrote that “Political economy or economics is a body of doctrine relating to economic phenomena” (Keynes, 1904), but in the same book, he separated the definition of political economy as an art that is related to economic policy
Our analysis demonstrated that when implementing public choice theory, there generally tends to be rare agreement by individual authors
Summary
Public choice theory has enjoyed many years of tradition within economic theory. Its theoretical contributions, which consist of recognizing the economic behavior of political market entities, have opened up a place in the field of economics for analyzing occurrences that had been the domain of political scientists for centuries. Public choice comprises research into the political market (Johnson, 1991) as well as the study of political mechanisms and institutions that limit the behavior of politicians (McNutt, 1996); it focuses on studying democratic regimes, institutions, legislative processes, and the behavior of interest groups, political parties, and bureaucracy (Pardo & Schneider, 1996). This is evidenced, for example, by McCarthy (2020), who uses the findings of the School of Public Choice to explain the Turkish government's behavior on Syrian refugees. According to Piano (2018) public choice theory is able to explain interaction between state capacity and competitive pressures in the ‘market for governance’ or relationship between investment in state capacity and economic development
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