Public Choice Theory - Criticisms

Criticisms

In their 1994 book Pathologies of Rational Choice Theory, political scientists Donald P. Green and Ian Shapiro argue that rational choice theory (of which public choice theory is a branch) has contributed less to the field than its popularity suggests. They write:

The discrepancy between the faith that practitioners place in rational choice theory and its failure to deliver empirically warrants closer inspection of rational choice theorizing as a scientific enterprise.

Linda McQuaig writes in All You Can Eat:

The absurdity of public-choice theory is captured by Nobel Prize-winning economist Amartya Sen in the following little scenario: “Can you direct me to the railway station?” asks the stranger. "Certainly," says the local, pointing in the opposite direction, towards the post office, "and would you post this letter for me on your way?" "Certainly," says the stranger, resolving to open it to see if it contains anything worth stealing.

It should be noted that scenarios of this type contain an implicit assumption of zero probability of the two strangers ever interacting again. With a positive probability of future interactions and the propensity of humans to use tit-for-tat type strategies (someone harms or helps you, you return the favor in kind), the optimal totally self-interested decision may be to point to the train station. Furthermore, as David D. Friedman observes, the benefit of cheating the stranger on one occasion may not be worth the mental effort of conceiving a way to do so and weighing the odds of suffering the consequences. Sen, in fact, has participated in the development of public choice theory, in such works as Collective Choice and Social Welfare.

James Buchanan and Gordon Tullock outline the limitations of their methodology in their work Calculus of Consent:

“even if the model proves to be useful in explaining an important element of politics, it does not imply that all individuals act in accordance with the behavioral assumption made or that any one individual acts in this way at all times… the theory of collective choice can explain only some undetermined fraction of collective action. However, so long as some part of all individual behavior… is, in fact, motivated by utility maximization, and so long as the identification of the individual with the group does not extend to the point of making all individual utility functions identical, an economic-individualist model of political activity should be of some positive worth.”