Tuesday, April 03, 2007

Public Choice 101

In JFK airport Monday, I had a chance to muse over the past week at the World Public Choice Society Conference with Prof. Richard Wagner while waiting for my connecting flight to Washington. We discussed the vast differences between the European and American societies. Being from one of the central schools for public choice in the US-George Mason-we both naturally thought the average European notion of government was a little strange.

The basic difference that kept popping up was the American school tends to accept a self-interested government as an obvious given. The European school, however, often invoked assumptions of the benevolant dictator and then ran some mathematical models (or econometrics). The American school, meanwhile, tends to shy away from such tools.

What's strange about this is that the great insight of the founder of public choice is that government agents are not benevolant-they are human just like anyone else. To do away with such an insight so casually and consistently seems to miss the point about why public choice is so interesting and vital to our understanding of markets.

Who knows why the societies are so different? Is it the European's more prevalent welfare state? Is it the American's emotional commitment to markets? Is it path dependence, originally spiraled from random events? I'm not sure of the answer, but it seems the European school is really missing out.

5 comments:

Jacob said...

Perhaps it's historical - if a government does something so unpleasant to you that you have to colonize a completely unknown landmass, you'll never really trust governments again. Plus, the fact that our government is much more fresh helps; there weren't any ages-old social norms about divine blessings or special status.

Warren said...

Maybe Tyler has an answer

http://www.marginalrevolution.com/marginalrevolution/2007/04/a_simple_model_.html

Mike said...

When you say The European model, do you really mean Continental? The Anglosphere has a pretty long tradition of smaller government, distrust of the government that exists, and a legal framework that takes into account the belief that individuals have a better idea of what works than a government far away. I'm a bit biased, with the pro common law agenda they teach in law school, but there is something to be said about the kind of culture that develops around the common law, as opposed to the civil law.

David said...

England is a little more of a mixed bag, to be sure, but I met participants on both sides of public choice. Pretty strongly in those sides, too. (For example, LSE tends to be very mathematical while I met someone from the University of Manchester who was more American in his views of public choice.) You'd really have to ask a native to get an accurate picture, but my instinct says England leans more to the European camp.

Mike said...

David,

Your distinction between the two people seems like it could be easily explained away by your own description: "LSE tends to be very mathematical." In this case, it's the nature of the kind of material studied. You and I took Mathematical Economic Modeling; the higher level differential equations boil down the entirety of "technology" into a single variable (or assume it away entirely). That such economists would then neglect to model human infallibility isn't so much an oversight or blind spot as the nature of the kind of analysis they do. I would imagine most of the mathematically-minded economists don't care about public choice, not because they disagree with its empirical observations, but because what it has to say is entirely uninteresting to what they do.