Public Choice Theory Research Articles

Insurrection through the balance sheet

Abstract What has actually happened to the political economy of the United States over the last half-century? For too long now, ‘neoliberalism’ has been the standard answer given, yet today, the term seems to have lost both its analytic and critical capacities. Melinda Cooper’s Counterrevolution offers readers a fresh and productive response to this fundamental question of contemporary political economy. Cooper comes neither to praise nor bury neoliberalism but to shift from the level of generalizing accounts or polemics to the level of concrete ideas and the policies they have engendered. She directs attention away from the Chicago school and toward both the Virginia School of public choice theory and a long line of supply-side thinkers. On strictly economic grounds, these two strands ought to be in tension, but Cooper illuminates their political convergence: agreeing to constrain ‘certain kinds of public spending’, they implemented a politics committed to inflating asset values for the wealthy while holding workers’ wage growth in check. This balance-sheet insurrection, which directs the flow of capitalist value upward, stopped and reversed the potential Keynesian revolution that had been underway in the 1950s and 1960s.

EFFECT OF PUBLIC PRIVATE PARTNERSHIP FINANCING STRUCTURE ON COMPLETION OF GEOTHERMAL ENERGY DEVELOPMENT PROJECTS IN KENYA

Objective: To determine the effect of Public Private Partnership (PPP) financing structure on the completion of geothermal energy development projects in Kenya. Theoretical Framework: The study used agency and public choice theories to analyze the dynamics between PPP financing structure and completion of geothermal energy development projects. Methodology: A cross-sectional census survey in Kenya surveyed 48 geothermal energy development projects, collecting quantitative data through structured questionnaires and qualitative insights from industry regulators, financiers, and practitioners. A combination of descriptive, correlation, and linear regression statistical models were applied. Multiple diagnostics tests and data triangulation were performed. Results and Discussion: The study results provide strong statistical evidence depicting a positive relationship between PPP financing structure and the completion of geothermal energy development projects in Kenya. The findings suggest that as the level of PPP involvement increases, so does the likelihood of faster project completion. The study also reveals that a balanced PPP financing structure has a substantial effect on the completion of geothermal energy development projects. The analysis demonstrates that a hybrid PPP financing structure comprising recommended proportions of private and government equity, commercial and concessional loans, hybrid finance, and grants significantly affects project completion outcomes. Research Implications: The study emphasizes the significance of a structured PPP financing model, comprising private and government equity, concessional and commercial loans, hybrid finance, and mixed grants, in mitigating inherent PPP risks for enhanced project completion outcomes. In addition, effective government support measures and robust delivery capability of developers jointly influence the two variables in a significant manner. Originality/Value: This study uniquely analyzes the influence of PPP financing structure on the completion of geothermal energy development projects in Kenya, integrating quantitative and qualitative data for a comprehensive perspective, thus offering essential insights for stakeholders.

Determinants of receiving government support by small and medium-sized enterprises in Russia

Government support measures help companies overcome various restrictions impeding their growth and develop ment, which is of special relevance for small and medium-sized enterprises (SMEs). These measures, therefore, must reach the target companies and ensure efficient allocation of resources. The article reveals key characteristics of SMEs in Russia that increase the probability of them receiving government support. The research methodology is based on public interest theory, public choice theory and the concept of economic freedom. The research method is a two-step regression analysis, in which the binary choice model is first evaluated, and then the LASSO model is used to assess the impact of the textual content of the companies’ websites. The dataset of the study is represented by data on 2,176 Russian metallurgical enterprises for 2020–2023, of which 57% were receiving government support. The results of the first step of evaluation showed that the organization’s age and size meas ured by revenue were the key factors associated with the probability of receiving government support. At the second step, we found that the mention of certain goods or materials on the websites, the enterprise’s location and orientation towards foreign stakeholders were significantly related to the likelihood of getting state support. The study offers tools for analyzing the determi nants of government support for SMEs and highlights the importance of this analysis for more efficient allocation of government resources.

Geoff Brennan and Public Policy

Geoffrey Brennan made a contribution to public policy that was broad, reflecting his own inter-disciplinary research interests – from conventional tax and public finance issues, through to constitutional political economy and institutional design. This contribution was tempered by Brennan’s own reluctance to offer direct policy recommendations, partly a function of natural epistemic humility and also his views on the appropriate role of the economist in public debate – views shaped by his association with the Virginia school of Constitutional Political Economy. Brennan’s research interests evolved to include some contrarian insights on public finance issues, a major contribution to public choice theory, early development of the idea of expressive motives in voting behaviour, and the ‘economy of esteem’ as a motivator of human action. Despite this breadth, throughout his intellectual career, Brennan remained within the broad ‘methodological coherence’ of Virginia political economy – methodological individualism, the centrality of exchange, the Pareto criterion for welfare analysis and a predominant focus on the ‘rules of the game’.

교육바우처 정책 사상의 원류와 그 원리에 대한 소고

This study explores the ideological foundation of education vouchers, focusing on educational support programs for commoners during the French Revolution and the educational philosophies of Thomas Paine and John Stuart Mill. Thomas Paine emphasized the expansion of educational choice through government support and assistance for the poor, while John Stuart Mill advocated for educational improvement through free choice and competition. Their philosophies have become core ideas in the modern school choice movement and were institutionalized in the education voucher policy by Milton Friedman. This study analyzes the outcomes of education vouchers from the perspective of public choice theory and examines models such as the Tiebout hypothesis, Demand Side Financing, and Home and Community-Based Services (HCBS). Additionally, it explores the relationship between Hirschman's Exit-Voice-Loyalty model and the principle of voucher choice. In conclusion, this paper emphasizes how these concepts are related to choice and competition in public services. Furthermore, it highlights that the principles inherent in education vouchers serve as an important ideological foundation for democracy and economic development.

Place branding strategies through Winter Olympic games

ABSTRACT Purpose The purpose of this research is to examine how place branding strategies, undertaken by countries which belong to distinctive clusters, can manifest differently via the Winter Olympic Games. Methods In this paper, the experiences of Winter Olympics hosted by three countries (Russia, South Korea, China), are examined using Richelieu et al.’s framework, alongside clusters introduced in 2022. The study adopts a content analysis. Findings The framework is validated: the perceived importance of soft power and a country’s resources, differences in the measures and strategies used by the host countries, are confirmed. Practical implications Countries that set higher importance on sport diplomacy (Russia and China: “diplomacy branding”) are more assertive. In contrast, South Korea takes a more balanced approach, as it considers its action across a wider spectrum of areas (“balanced structure”). Research contribution The framework can explain the differences in the experiences of host countries, by also referring to the public choice theory. This paper illustrates how place branding strategies through sporting events, such as Winter Olympics, can differ between countries depending on the perceived role of public diplomacy, sport diplomacy, soft power and the economic resources invested. Originality/Value The article widens avenues for future research on major sporting events, through different clusters, by borrowing a holistic approach.

Oil Royalties In Brazil: Between Financial Compensation And Taxation – A Legal And Economic Analysis

This article examines the use and distribution of oil royalties in Brazil, which shifted from being treated as financial compensation to taxation following the enactment of laws by the National Congress. This change in the treatment of royalties can be explained by public choice theory, which suggests that the actions of parliamentarians reflect the interests of pressure groups. Consequently, the compensation intended for entities where oil and gas exploration takes place began to be treated as a tax, benefiting all entities within the federation. Thus, it is reasonable to admit that the law's approval overlooked some essential characteristics of the nature of royalties by modifying their distribution to subnational entities that do not have oil exploration activities. Through a critical approach, the article suggests the need for a conceptual and normative review to ensure that royalties fulfil their role as a financial compensation mechanism without harming economic growth or fiscal transparency.

Federal Public Resources in Response to Natural Disasters in Rio Grande do Sul

Objective: The objective of this study is to analyze the sources and allocation of federal public resources applied to natural disasters in the Brazilian state of Rio Grande do Sul in 2024. Theoretical Framework: Based on Public Choice Theory, the study investigates how self-interests can influence the allocation of public resources, which is relevant in the context of Brazilian public administration. Method: Using a descriptive and documentary approach, this qualitative research collected data from provisional measures and the Transparency Portal, analyzing the sources and amounts of funds quantitatively and their allocations qualitatively through the lens of Public Choice Theory. Results and Discussion: Most of the funds come from Official Credit Operations (41.80%) and Federal Financial Charges (13.97%). The allocation covers a range of areas from climate change mitigation to support for microenterprises. The diversity of allocations suggests an effort to meet multiple emerging needs and maximize political benefits, reflecting the influence of self-interests in public management. Research Implications: The study emphasizes the importance of transparency and accountability in public management, especially in disaster situations. By revealing how resources are allocated and identifying potential influences of self-interests, the research contributes to the formulation of more efficient and equitable public policies. Detailed understanding of the allocations can improve accountability and integrity in resource allocation, promoting governance practices that increase public trust in government actions. Originality/Value: Applying Public Choice Theory, this study offers insights into the efficiency and equity of resource allocation for natural disasters in Rio Grande do Sul, contributing to the literature on disaster management and public administration in Brazil.

Agroenergy Policies and the Influence of Interest Groups – the Case of Polo Agroindustrial e Bioenergético do Médio São Francisco in Bahia, Brasil

Objective: The objective of this article was to investigate how public policies to promote productive activities can be influenced by the actions of interest groups, affect decision-making, and consequently increase the risks of failure and generate government failures. Theoretical Framework: The theoretical framework adopted is the theories of Public Choice and Strategic Public Management, which provided the basis for understanding the context of the investigation. Method: The methodology consisted of literature review, interviews, policy analysis methodology (PAM) and case study. Data was collected through bibliographic and documentary research, semi-structured interviews with public officials, business people and researchers, and field visits for direct observation. Results and Discussion: The findings revealed that interest groups opposed to stricter regulations on the occupation of territorial space for the exploitation of natural resources influenced the decision-making process for setting the policy agenda, formulating and implementing policies. It also revealed the "permeability" of the government to pressure from these groups, which resulted in the nonimplementation of the Polo. Research Implications: The practical and theoretical implications of this research provide insights into how the findings can influence practices in the fields of state theory, public policy formulation and management, and territorial development, as well as in the productive, social, and environmental sectors. Originality/Value: This study contributes to the literature by relating the adopted theories to a real case of public policy failure, so that public policy makers can develop mechanisms to curb or minimize the influence of these groups in governments.

Filtering or facilitating productive entrepreneurship?

There is a paucity of knowledge on the conditions which enable productive entrepreneurship, particularly those which are policy-amenable like regulations. Rooted in opposing theories of public choice and public interest, we investigate the effect of several types of business regulation on productive entrepreneurship, accounting also for importance of corruption. First, we propose a composite measure of productive entrepreneurship based on three criteria: ability to capture current and potential economic gains, reflective of activities and output, and innovation-centric. Second, using a multi-source panel dataset comprising 1065 country-year observations for 118 countries during 2005–2016, we hypothesize and empirically test for the effect of three types of regulation relevant to business stages - Birth, Growth, and Exit (BSR, GSR, EXSR) - on our measure of productive entrepreneurship. Our findings advance growing insights on the highly heterogenous nature of regulation by type and even by tool (e.g. financial, procedural), and limited recent insights on drivers of productive entrepreneurship. We offer implications for research and for policy design.

Transforming a Day-Laborer's Quarter into a Service Hub: An Analysis of the Case of Kotobuki in Yokohama, Japan, Using Public Choice and Neo-Hegelian Theories

The inadequate provision of welfare services has long represented a persisting issue in addressing urban poverty, especially in districts where poverty converges. One such district, once a day laborer's quarter, is Kotobuki of Yokohama. However, given that Kotobuki is now recognized as a welfare center, this study analyzes why the abovementioned transformation occurred. Previous research examining this question focused especially on the role of civil society, neglecting that of the city government, despite its crucial role in providing welfare services. Furthermore, few studies have employed robust theories in their analysis. Against this background, this study aims to bridge these gaps, conducting in-depth interviews with city government officials and civil society personnel while using public choice and neo-Hegelian theories. The findings provide useful implications for policymakers in day laborers’ quarters worldwide, as well as insight into future welfare strategies, informing the development of public policies to address urban poverty.

Research on Vocational Education Management from the Perspective of Public Choice Theory

Vocational education contributes to the development of public values, with external effects on promoting social employment and achieving balance in educational structure. However, vocational education also enhances individual vocational abilities, which does not meet the standard of non-excludability. When individuals receive vocational education, it implies a reduction in the opportunity for others to enjoy vocational education. Public choice theory primarily features the analysis and discourse of political activities through economic analysis theory. Therefore, this paper, based on theories such as the attributes of public goods, the economic agent hypothesis, and government failure, focuses on elucidating the internal issues of schools, provision, and management in vocational education. It seeks effective methods to solve these problems to enhance the efficiency and quality of vocational education management.

The Relationship between Corruption and Economic Development

Purpose: The general objective of the study was to explore the relationship between corruption and economic development. Methodology: The study adopted a desktop research methodology. Desk research refers to secondary data or that which can be collected without fieldwork. Desk research is basically involved in collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories. Thus, the study relied on already published studies, reports and statistics. This secondary data was easily accessed through the online journals and library. Findings: The findings reveal that there exists a contextual and methodological gap relating to corruption and economic development. Preliminary empirical review revealed that corruption significantly impedes sustainable economic growth by undermining investor confidence, distorting market mechanisms, and perpetuating cycles of poverty and inequality. Strong institutional frameworks, democratic governance structures, and targeted policy interventions were identified as crucial in mitigating corruption risks and fostering economic development. The findings underscored the importance of transparency, accountability, and international cooperation in combating corruption and promoting inclusive growth, highlighting the need for evidence-based strategies to address corruption challenges and advance human well-being globally. Unique Contribution to Theory, Practice and Policy: The Institutional theory, Political Economy theory and Public Choice theory may be used to anchor future studies on corruption and economic development. The study offered valuable recommendations with significant contributions to theory, practice, and policy. Theoretical insights enriched our understanding of corruption's causal mechanisms, while practical recommendations guided practitioners in addressing corruption risks and promoting ethical behavior. Policy recommendations urged governments to prioritize anti-corruption reforms and enhance international cooperation. These contributions bridged the gap between theory and practice, empowering stakeholders to combat corruption effectively and foster sustainable economic development.

The Political Economy of NORAD

ABSTRACT This introductory article provides an overview of the North American Aerospace Defense Command (NORAD) as well as the contents of this special issue. NORAD is one of the oldest bi-national defence agreements in the world but the economics assessment of it remains scant. This special issue is one attempt to address this oversight. The articles in this special issue focus on the economic aspects of NORAD and its modernization. They delve into economic theories of alliances, burden sharing, potential private benefits of modernization, public choice theory and the impact on local communities and industries. By focusing on the political economy of NORAD, this introductory article underscores the importance of NORAD in the face of evolving threats and calls for greater attention from defense economists to address the complex economic and strategic dynamics involved.

Impact of Subsidy Removal on Smallholder Livestock Farmers' Productivity in Nigeria

Purpose: The aim of the study was to analyze the impact of subsidy removal on smallholder livestock farmers' productivity in Nigeria. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The impact of subsidy removal on smallholder livestock farmers in Nigeria resulted in both challenges and opportunities. Initially, it led to increased input costs and decreased profitability, but it also spurred innovation and efficiency improvements. However, limited access to credit and inadequate support structures hindered overall productivity. Tailored policy interventions are crucial to address these challenges and promote sustainable growth in the sector. Unique Contribution to Theory, Practice and Policy: Public choice theory, theory of economic adjustment & dependency theory may be used to anchor future studies on analyze the impact of subsidy removal on smallholder livestock farmers' productivity in Nigeria. Cooperative farming models encourage resource pooling and collective action, reducing costs and enhancing market access. By tailoring subsidy reintroduction to the most vulnerable sectors, policies can be more targeted and efficient, ensuring optimal use of resources.

Analysis of Government Policies on Rice Production in Thailand: A Policy Evaluation Study

Purpose: The aim of the study was to investigate the analysis of government policies on rice production in Thailand: a policy evaluation study. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The analysis of government policies on rice production in Thailand revealed that while price support policies have effectively stabilized farmers' incomes in the short term, they have also increased dependency on government subsidies, potentially stifling innovation in the agricultural sector. Furthermore, the study found that water management and technological adoption policies were beneficial in improving yields and sustainability, but their implementation was uneven across different regions. Recommendations from the study emphasized the need for a more balanced approach that reduces dependency on subsidies, enhances farmers' access to markets, and promotes sustainable agricultural practices. Unique Contribution to Theory, Practice and Policy: Public Choice Theory, Policy Feedback Theory & Institutionalism may be used to anchor future studies on analysis of government policies on rice production in Thailand: a policy evaluation study. By implementing these practices, stakeholders can achieve more sustainable, productive, and economically viable outcomes for rice farmers and the broader agricultural community. The policy contributions of these recommendations are aimed at creating a more robust, effective, and sustainable framework for rice production in Thailand.

Nurturing neighborhoods, cultivating local businesses: The effects of amenities-to-infrastructure spending on new business licenses in Chicago's wards

Based on public choice theory, this study examines how the relative focus on amenities-to-infrastructure spending is associated with the concentration and the subsequent volume of new business licenses. Using data from the Aldermanic Menu Program and business license records in Chicago, the key insight from our study suggests a "seeding and spreading" effect, where increased amenities-to-infrastructure spending is associated with a less diverse distribution of new business licenses, but that in turn, is associated with an increase in the overall volume of new businesses licenses in the following period. The effect sizes are small. The study contributes to the literature on urban economics and entrepreneurship by extending the concept of amenity-focused public spending.

Эволюция эмпирических подходов в оценке эффективности международных санкций

Economic sanctions lead to a redistribution of public welfare, as well as change the political decision-making process, since certain groups in each country lobby their interests, benefiting from sanctions pressure. Empirical models of sanctions analysis are based on the theory of public choice, which allows for a comprehensive assessment of their effectiveness. The results of the analysis showed that a feature of the studies of sanctions wars is the use of fundamental economics and political science, as well as game-theoretic models as a basis for analyzing the complex effect of sanctions. To maximize the effect, the initiator countries should set clear targets, because otherwise the time horizons of the sanctions wars are maximally prolonged and it will be impossible to predict when the targets will be reached.

State Taxation of the Motorcycle Transport Business and Internally Generated Revenue in Ebonyi State, Nigeria, 2015 to 2021

In classical literatures, the informal sector is regarded as all those economic activities that are neither taxed nor monitored by any form of government. However, with the downturn of economic activities in Nigeria due to the dwindling oil revenue which forms the major revenue generation and export earnings of Nigeria, the informal sector, specifically the motorcycle transport business popularly known in Nigeria as Okada has come under some form of government taxation and monitoring in some states in the country. This was to shore up their revenue base which has dwindled over the years. Extant literatures have not been able to examine the contribution of informal sector, specifically, the motorcycle transport business to internally generated revenue of the sub-units, especially Ebonyi State within the period under study. Thus, we pose the question: has the taxation of the motorcycle transport business operation improved on the internally generated revenue of Ebonyi State between 2015 and 2021? We anchored our analysis on Public Choice Theory of politics and economics. Data for the study were collected through both primary and secondary sources. The study found that despite the intensive taxation of the informal sector in Ebonyi State, specifically, the motorcycle transport business; the internally generated revenue of the state seems to be decreasing rather than increasing, given the number of taxable objects that has been brought under its internally generated revenue sources. The study recommended that the government should do more in the area of its internally generated revenue to ensure efficiency in collectability and remittances.

Public choice economics of the Ukraine crisis

We use public choice theory to examine the calculus of the Russian aggression against Ukraine. We hypothesize that Putin’s regime acts as a tinpot dictatorship, using political loyalty and repression to stay in office. During Putin’s first two-term presidency, an improvement in Russia’s economic performance increased the supply of political loyalty and resulted in a slow fall in political repression. The global financial crisis deteriorated Russians’ living standards between Putin’s second and third terms in office. The deterioration in the country’s economic performance unambiguously resulted in a fall in the supply of loyalty and increased repression. Consistent with our hypothesis, we argue that Putin’s regime pursued military conquest to increase the aggregate supply of political loyalty.