Abstract
In a number of works, James M. Buchanan set out a proposal for a ‘demogrant’—a form of universal basic income that applied the principles of generality and non discrimination to the tax and the transfer sides of the scheme and was to be implemented as a constitutional rule outside the realm of day-to-day politics. The demogrant has received surprisingly little scholarly attention, but this article locates it in Buchanan’s broader constitutional political economy project and shows it was a logical application of his theoretical framework to the problem of inefficient and unfair welfare systems when reform to the basic institutions of majoritarian democracy was not forthcoming. The demogrant aims to end the problems of majority cycling and rent seeking that plague contemporary welfare states and therefore offers a model of welfare without rent seeking—a constitutional welfare state. We compare Buchanan’s demogrant model to other universal basic income and negative income tax models and consider the most important criticisms. We conclude that rescuing the demogrant model from relative obscurity would be a fruitful future task of applied constitutional political economy and public choice.
Highlights
All contemporary democratic states make extensive transfer payments to qualifying citizens
In the grammar of public choice, the welfare state has become a huge rent seeking enterprise in which a large proportion of the population uses the political process to secure benefits funded by others, while the resulting system traps many in genuine need into a lifetime of relative deprivation
It will be concluded that there are reasons to be sceptical that a demogrant would be the panacea that Buchanan suggested given the difficulty of its implementation and the likely transaction costs involved, but the proposal merits further attention from scholars working in public choice and constitutional political economy and those developing proposals for a universal basic income
Summary
All contemporary democratic states make extensive transfer payments to qualifying citizens. This article provides a systematic account of Buchanan’s demogrant model set out in the context of his wider intellectual project, relates the proposal to other basic income models, and critically evaluates the idea After this introduction, the article will locate the demogrant idea in Buchanan’s theory of politics as exchange and his long-standing concerns about the endurance of inherently exploitative political arrangements—the idea that societies can become trapped on the ‘off-diagonals’ of game theoretic models of social coordination and conflict. The article will locate the demogrant idea in Buchanan’s theory of politics as exchange and his long-standing concerns about the endurance of inherently exploitative political arrangements—the idea that societies can become trapped on the ‘off-diagonals’ of game theoretic models of social coordination and conflict It will set out the development of the demogrant idea through Buchanan’s career and show how it arose as a practical application of his commitment to the principles of generality and non discrimination. It will be concluded that there are reasons to be sceptical that a demogrant would be the panacea that Buchanan suggested given the difficulty of its implementation and the likely transaction costs involved, but the proposal merits further attention from scholars working in public choice and constitutional political economy and those developing proposals for a universal basic income
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