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Saving government failure theory from itself: recasting political economy from an Austrian perspective

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  • Peter Boettke
  • Christopher Coyne

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  • Peter Leeson

Abstract

The economic approach to politics revolutionized the way scholars in economics and political science approached the study of political decision-making by introducing the possibility of government failure. However, the persistent and consistent application of neoclassical models of economics also seemed to suggest that once the full costs were accounted for, this failure was an illusion. This paper counters these arguments, typically associated with George Stigler, Gary Becker and Donald Wittman, by focusing on the underlying economic theory. We develop an alternative model of political economy grounded in the Austrian conception of the dynamic market process. Copyright Springer Science + Business Media, LLC 2007

Suggested Citation

  • Peter Boettke & Christopher Coyne & Peter Leeson, 2007. "Saving government failure theory from itself: recasting political economy from an Austrian perspective," Constitutional Political Economy, Springer, vol. 18(2), pages 127-143, June.
  • Handle: RePEc:kap:copoec:v:18:y:2007:i:2:p:127-143 DOI: 10.1007/s10602-007-9017-1
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    References listed on IDEAS

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    1. Rowley, Charles K, 1997. "Donald Wittman's The Myth of Democratic Failure: Review Article," Public Choice, Springer, vol. 92(1-2), pages 15-26, July.
    2. Sutter, Daniel, 2002. "The Democratic Efficiency Debate and Definitions of Political Equilibrium," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 15(2-3), pages 199-209, June.
    3. Meir Kohn, 2004. "Value and Exchange," Cato Journal, Cato Journal, Cato Institute, vol. 24(3), pages 303-339, Fall.
    4. Demsetz, Harold, 1982. "Barriers to Entry," American Economic Review, American Economic Association, vol. 72(1), pages 47-57, March.
    5. Reder, Melvin W, 1982. "Chicago Economics: Permanence and Change," Journal of Economic Literature, American Economic Association, vol. 20(1), pages 1-38, March.
    6. Boettke, Peter J, 2002. "Information and Knowledge: Austrian Economics in Search of its Uniqueness," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 15(4), pages 263-274, December.
    7. Stigler, George J, 1992. "Law or Economics?," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 455-468, October.
    8. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
    9. Ikeda, Sanford, 2003. "How Compatible Are Public Choice and Austrian Political Economy?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 16(1), pages 63-75, March.
    10. Demsetz, Harold, 1969. "Information and Efficiency: Another Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 1-22, April.
    11. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-1155, December.
    12. Boettke, Peter J & Lopez, Edward J, 2002. "Austrian Economics and Public Choice," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 15(2-3), pages 111-119, June.
    13. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
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    Citations

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    Cited by:

    1. Niclas Berggren, 2012. "Time for behavioral political economy? An analysis of articles in behavioral economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 25(3), pages 199-221, September.
    2. Diana Thomas & Michael Thomas, 2014. "Entrepreneurship: Catallactic and constitutional perspectives," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(1), pages 11-22, March.
    3. Jennifer Dirmeyer, 2010. "The Power of Ideas: The "Peter Boettke" Strategy for Advancing the Science of Prosperity," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 26(Fall 2010), pages 117-124.
    4. Marta Podemska-Mikluch & Richard Wagner, 2013. "Dyads, triads, and the theory of exchange: Between liberty and coercion," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(2), pages 171-182, June.
    5. William Keech & Michael Munger, 2015. "The anatomy of government failure," Public Choice, Springer, vol. 164(1), pages 1-42, July.
    6. Niklas Potrafke, 2012. "Political cycles and economic performance in OECD countries: empirical evidence from 1951–2006," Public Choice, Springer, vol. 150(1), pages 155-179, January.
    7. repec:kap:copoec:v:28:y:2017:i:3:d:10.1007_s10602-016-9223-9 is not listed on IDEAS
    8. Anthony Evans, 2014. "A subjectivist’s solution to the limits of public choice," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(1), pages 23-44, March.
    9. Facchini, François & Melki, Mickaël, 2013. "Efficient government size: France in the 20th century," European Journal of Political Economy, Elsevier, vol. 31(C), pages 1-14.
    10. François Facchini & Mickaël Melki, 2011. "Optimal government size and economic growth in France (1871-2008) : An explanation by the State and market failures," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00654363, HAL.
    11. Peter Boettke & Nicholas Snow, 2014. "Political economy and the science of association: A suggested reconstruction of public choice through the alliance of the Vienna, Virginia, and Bloomington schools of political economy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(1), pages 97-110, March.
    12. Peter Boettke & Christopher Coyne, 2009. "Best case, worst case, and the golden mean in political economy: An introduction to a symposium on Tim Besley’s principled agents? The political economy of good government," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 22(2), pages 123-125, June.

    More about this item

    Keywords

    Entrepreneurship; Government failure; Market failure; Market process; Public choice; B52; B53; H11;

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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