Public Goods and the Origins of Equilibrium Democracy

Abstract

Research on the relationship between neoliberalism and democracy has mostly overlooked the important theoretical contributions of public goods theorists in extending market mechanisms beyond the economy. Yet, many aspects associated with the rise of neoliberalism would have been unimaginable without these economists’ contributions to the development of a new variety of liberal democracy, based on the model of the market. The separation of provision and production, the introduction of market-like competition in public services, and the use of performance incentives are inexplicable without reference to public goods theorists’ reinvention of politics as the demand for and supply of publicly provided goods and services. Focusing on the contributions of Paul Samuelson, Charles Tiebout, and Vincent Ostrom rather than the usual suspects associated with the Mont Pèlerin Society, the article argues that public goods theory represents a positive vision of the market-oriented democratic state that most scholars of neoliberalism have overlooked. This positive vision of marketized provision of public goods and services represents a new model of liberal democracy rather than the end of it.