He Application of Economic Theory To Politics

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he application of economic theory to politics] forced political scientists to pay attention to the struc tured

institutional constraints on individual maximiz ing behavior. Understanding political participation indicated that
individuals did not make atomistic choices in a structureless environment, but responded to blandishments
shaped by the social structures of which they were a part.... It was only my focusing analysis on the
institutional determinants of voting, legislative, and regulatory behavior that anomalous behavior began to be
understood.... As the force of political institutions was revealed, the emphasis in economic modeling shifted
subtly from the determinants of the self-interested choice, to restraints on self-interested choice. Increasingly,
insti tutional analysis focused on what came to be known as the ‘‘commitment’’ issue—settings in which long
term gains could be achieved by limiting, rather than expanding, the scope of individual choice. CONCLUSION
The application of neoclassical economic theory to politics has clearly contributed in a substantial way to an
improved understanding of political institutions and outcomes. It is also the case, however, that many Public–
Punctuated © 2008 by Taylor & Francis Group, LLC 1622 Public Choice Theory key predictions, in particular
those fundamentally emanating solely from the rational egoist assumptions of neoclassical economic theory,
have not been well supported by empirical research. A credible case can be made that the primary long-run
impact of neoclassi cal economics on the study of political institutions and behavior is the emergence of the
new field of positive political theory that has led to a richer, more varied understanding of politics: Public–
Punctuated [C]ontrary to the early economists in political science the most powerful determinants of
outcomes are not the atomistic maximizing choices of individuals, but the groups and institutions that guide
and constrain self-interested individual choice. Our understanding of the anomalies generated by the first
generation of political economic analysis has propelled political science (and perhaps economics!) to under
stand the rich and compelling social norms and insti tutional contracts that govern political exchange in its
diversity.[2] REFERENCES 1. Mueller, D.C. Public Choice II; Cambridge University Press: New York, U.S.A., 1989;
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A pure theory of local public expendi ture. J. Polit. Econ. 1956, 64, 416–424. 5. Tullock, G. The welfare costs of
tariffs, monopolies, and theft. Western Econ. J. 1967, 5 (June), 224–232; Krueger, A. The political economy of
the rent-seeking society. Am. Econ. Rev. 1974, 64, 291–303; and Tollison, R.D. Rent-seeking: a survey. Kyklos
1982, 35 (4), 575–602. 6. Niskanen, W.A., Jr. Bureaucracy and Representative Government; Aldine-Atherton:
Chicago, IL, U.S.A., 1971. 7. Pommerehne, W.; Schneider, F. Unbalanced growth between public and private
sectors: an empirical exam ination. In Public Finance and Public Employment; Haveman, R., Ed.; Wayne State
University Press: Detroit, MI, 1982; 309–326. 8. Ostrom, E. Collective action and the evolution of social norms.
J. Econ. Perspect. 2000, 14 (3), 141–145. 9. Williamson, O.E. The new institutional economics: taking stock,
looking ahead. J. Econ. Lit. 2000, 38 (3), 595–613. 10. Dixit, A. The Making of Economic Policy: A Trans action
Cost Politics Perspective; Cambridge University Press: Cambridge, 1996

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