Why They Do It
An Interactive Guide to Public Choice
Welcome: Politics Without Romance
In your previous lectures, you explored big ideas about markets and consequences. Now, we apply a similar lens to government.
What if we assume political actors—voters, politicians, and government officials—are primarily self-interested, just like people in a market? This is the core assumption of Public Choice Theory.
It’s not saying people are “bad.” It’s a model that assumes they’re utility-maximizers. They want to get the most benefit (money, power, prestige, or just feeling good) for the lowest cost. This app lets you explore how this simple, if cynical, idea provides powerful explanations for what people in and around government *do*.
Click on an actor above to begin exploring.
The Voter
We like to think voters are trying to do what’s best for the country. But from a “rational choice” perspective, the simple act of voting is a puzzle. And being a *well-informed* voter? That’s even more puzzling.
Interaction 1: The Paradox of Voting
Why spend time and effort to vote when your single vote has a microscopic chance of changing the outcome?
The Rational Calculation
Cost: Time off work, travel to polls, effort to register. (Cost > 0)
Benefit: (Chance your vote is decisive) x (How much you care). (Benefit ≈ 0)
Result: The cost outweighs the benefit. It is *irrational* to vote.
But… People *Do* Vote!
This “paradox” shows the simple model is incomplete. Other models explain it:
- Expressive Voting: Voting isn’t *instrumental* (to change the outcome). It’s *expressive*—like cheering for your team. It makes you feel good.
- Duty Model: People vote from a sense of civic duty, ethics, or social pressure.
- Sociological Model: We are not isolated atoms. We are influenced by our family, community, and social groups who expect us to vote.
Interaction 2: Rational Ignorance
Okay, you’re at the polls. You can’t be an expert on everything. How do you decide? The cost of *learning* is high.
“My Wallet Hurts”
This issue directly affects you. The cost to “learn” is low (you see it at the pump), and the benefit is clear. You can make an informed, self-interested vote easily.
“What’s a sugar beet tariff?”
This issue is complex. The cost to learn about it is *very high* (hours of research). The direct benefit to *you* is tiny, maybe pennies on a bag of sugar.
Result: It is *rational* to be ignorant. You save time by voting your party line, taking a cue from a trusted source, or just skipping the issue.
Key Takeaway: This is Rational Ignorance. It explains why Special Interest Groups (who care *a lot* about this one issue) can lobby for policies that are bad for the (rationally ignorant) majority.
Politicians & Parties
If a politician’s primary, self-interested goal is to win the next election, how does that shape their behavior? Public Choice theory sees them as “vote-maximizers.”
Interaction 1: The “Main Street” Model
In a two-party system where voters are on a left-right spectrum, where do the candidates position their platforms? This model (from Harold Hoteling) gives a powerful answer.
Candidates take their positions…
The Median Voter Theorem
To capture the most votes, both candidates will converge on the platform of the Median Voter. This is why Democratic and Republican candidates often sound similar in a general election.
Texas Example:
Think about a Texas Republican primary vs. the general election.
- In the *primary*, the “median voter” is very conservative. Candidates move far to the *right* to win.
- In the *general election*, the “median voter” is more central. The *same candidate* will now move back to the *center* to win.
Why do “bad” policies exist?
If politicians just follow the median voter, why do we get policies that seem to benefit only a few people at the expense of everyone else?
Concentrated Benefits & Diffuse Costs
A politician gets a big, concentrated *benefit* (votes, funding) from the special interest. The *cost* of the policy is spread so thinly across millions of taxpayers that no one is motivated enough to fight it. The politician’s self-interest aligns with the special interest, not the general public.
Bureaucrats
What about unelected government officials—the people who run the agencies? Their self-interest (power, prestige, salary, larger staff) isn’t tied to votes, but to their agency’s budget. Public Choice economist William Niskanen argued they are “budget-maximizers.”
Interaction: Efficient vs. Maximized Budget
A bureaucrat knows the *true cost* of their agency’s services, but the politicians (Congress) who fund them don’t. They can use this information asymmetry to grow their budget beyond the most efficient point.
What this chart shows:
- Socially Efficient Budget: This is the ideal point for society, where the benefit of one *more* dollar of spending equals its cost. (Marginal Benefit = Marginal Cost).
- Bureaucrat’s Goal Budget: This is the largest *possible* budget the bureaucrat can get, where the *total benefit* of the agency just equals its *total cost*. Any higher, and Congress would see it’s a net loss and cut it.
Because the bureaucrat has the information advantage, they can push for their goal budget, resulting in agencies that are larger and more expensive than the “efficient” size.
Conclusion & Discussion
Public Choice and Rational Choice theories are *models*. They don’t claim people are “bad” or that “public interest” never exists. They argue that self-interest is a powerful and consistent motivator, and by assuming it’s the *primary* motivator, we can explain many political outcomes that otherwise seem puzzling.
Key Takeaways:
- Rational Ignorance: Explains why voters aren’t experts and why special interests can win.
- Median Voter Theorem: Explains why major parties often sound similar in general elections.
- Concentrated Benefits, Diffuse Costs: Explains why it’s so hard to cut programs that benefit specific groups.
- Budget Maximization: Explains why government agencies have a natural tendency to grow.
Discussion Questions
- Does the “expressive” (cheering for a team) or “social group” model feel more true for your own decision to vote (or not vote)?
- Have you seen the Median Voter Theorem in action in a recent Texas election (e.g., a candidate “sounding different” in the primary vs. the general)?
- You’ve already discussed Hayek’s “Road to Serfdom.” How do these Public Choice ideas connect to Hayek’s arguments? (Hint: Both are skeptical of centralized power and the incentives of those who hold it).
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