Public Choice Theory and Legal Institutions

Abstract

This article asks what public choice can teach about legal institutions and their governing framework of public law. The chapter begins with an overview and assessment of two important components of public choice: social choice theory (stemming from Arrow’s Theorem) and interest group theory. It then considers the use of public choice models to explain the behavior of legislatures, agencies, and courts. The core public choice insight is that institutional structures are responses to fundamental problems relating to collective action. The chapter concludes, however, that normative use of specific public choice models should be undertaken with caution. The models are likely to be most useful when (1) they are informed by deep familiarity with specific institutional contexts; (2) reforms are context-specific; and (3) proposed changes are at the margin rather than involving major structural changes.