James M. Buchanan and Public Choice Theory

Abstract

One of the economists who has undoubtedly been the most original and successful in applying the tools of economic analysis to a field other than economic activity is James M. Buchanan, winner of the 1986 Nobel Prize in Economics. In its announcement of the award to Professor Buchanan, the Royal Swedish Academy of Sciences stated that the prize was awarded for "his development of the contractual and constitutional bases for the theory of economic and political decision-making". Likewise, the media, in their attempt to summarize Buchanan's contributions in a single sentence, summed them up as "having made it clear that politicians are motivated by their own self-interest. Both formulations, albeit in a simplified form, highlight Buchanan's central role in the gradual transformation that has taken place in the way economists and political scientists conceive and study the relationship between governments and the governed. Let us see what Buchanan's main contributions are in his theoretical elaboration of a logically convincing method of integrating economic and political processes, thus placing his work within what we may call unorthodox or unconventional economics.