Public choice theory is basically the economic theory of political science that was developed by Gordon Tullock and James Buchanan Jr. The term, though coined in the 50’s, received widespread public attention when Mr Buchanan was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 1986. This theory, for the first time, attracted the attention of the experts to the fact that individual actors i.e. public, manager or a client, make a utility maximizer who attempts to increase net benefits.
The three basic assumptions underlying this theory are economic man, public good requiring the cooperative behaviour, and desirability of institutional arrangements. It contends that the role of public administration is to develop service delivery system at different small-scale levels of government. Actually, it focuses a mixture of economics and politics to maximize the public good without making other members of society negatively affected by tradeoffs or externalities. More vividly, the Pareto optimality can best be used to describe this phenomenon; it is a state of allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off. Pareto optimality occurs when distribution of well-being cannot be improved for one individual without reducing that of another member of society. In other words, resource allocation should be efficient and ideal in the sense that it satisfies individual want to the maximum, without compromising others’ needs.
One of the chief proponents of public choice theory, Vincent Ostrom is of the view that bureaucratic administration should be replaced with democratic administration because under the garb of public interest theory, they try to maximize their own power and interests. At the same time, he challenged the traditional public interest theory that decision-making in democratic government is motivated by unselfish interest and benevolence of elected representatives or traditional bureaucracy.
The public choice theory takes dim view of career bureaucracy and dubs it inefficient and unresponsive. One of the simple reasons behind is that it is not subject to market forces. Here, choice implies competition in public administration to make it more responsive, efficient and effective. The institutional pluralism provides choice to individual in benefitting him/herself from available services. In that case, the organization should have democratic administration without overlapping jurisdiction and should focus on self-efficiency and individual’s satisfaction.
The public choice theory takes dim view of career bureaucracy and dubs it inefficient and unresponsive.
In public affairs, a voter may not be well informed about government activities or he may lack incentive to monitor those. Therefore, the impact of casting a vote by a well-informed voter may be nil because the voter virtually has no chance to determine the outcome of the election. But in making choice in private sector is something different as it is going to have its impact because being informed and well aware of the facts and situation may affect one’s decision. But voting lacks that kind of direct result. Here comes the technique of logrolling or vote-trading. An urban legislator votes to subsidize a rural water project in order to win another legislator’s vote for a subsidy on some other project in urban area. Only democratic administration can safeguard the interests of insouciant actors in service delivery.
Rational incentive is another phenomenon which is reflected in collective decision making. Even the politicians who go for pork barrel projects do so at the cost of public exchequer since it makes them psychologically strong, and feel powerful and important. Similarly, special interest lobbyists also behave rationally. They gain huge government favours just by spending very less; otherwise they may lose out it to their competitors.
Public choice theory advocates that self-interest is the sole motivator for individual, bureaucracy and politicians who all seek to work for maximization of their own interests. Civil servants try to please their superiors and pass only selected information since they are motivated by career advancement and development. Superiors may impose tight control but this may result in more incentives for distorted information and creating institutional constraints. Therefore rather through integrated bureaucratic hierarchy, multi-organizational arrangements should be made to ensure public service delivery and the new trends like outsourcing, Public-Private Partnerships, and privatization are the steps leading to greater marketization of public goods and thereby creating more choice for the public.