The Role of Homo Oeconomicus in the Political Economy of James Buchanan
Whenever the economic model of behaviour is to be applied, the utility function has – at least somewhat – to be specified. Buchanan generally prefers to apply a rather narrow version. However, he acknowledges that it is hardly possible to explain actual behaviour of individuals with such a version, so in performing empirical economic research he accepts that we have to use a more open one. He also acknowledges that people might behave differently in markets than they do in politics; other-regarding behaviour might be more pronounced in politics as compared to markets. Which version should be applied in constitutional economics, however, is a different question. Following a long ongoing tradition in political philosophy, he insists that – for methodological reasons – the narrow version is the correct one to be applied; this is the way to compare different sets of rules when analysing the possible abuse of power by rulers in order to prevent it as far as possible. The same should also be taken into account when analysing the process of policy advice. The narrow Homo Oeconomicus model should, however, not be misunderstood as a normative prescription.
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- Shlomo Maital, 1986. "Prometheus Rebound: On Welfare-Improving Constraints," Eastern Economic Journal, Eastern Economic Association, vol. 12(3), pages 337-344, Jul-Sep.
- James M. Buchanan, 1954. "Individual Choice in Voting and the Market," Journal of Political Economy, University of Chicago Press, vol. 62, pages 334.
- Frey, Bruno S, 1997. "A Constitution for Knaves Crowds Out Civic Virtues," Economic Journal, Royal Economic Society, vol. 107(443), pages 1043-53, July.
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"The Constitution of Economic Policy,"
American Economic Review,
American Economic Association, vol. 77(3), pages 243-50, June.
- Gordon, Scott, 1976. "The New Contractarians," Journal of Political Economy, University of Chicago Press, vol. 84(3), pages 573-90, June.
- Brennan, Geoffrey & Buchanan, James, 1983. "Predictive Power and the Choice among Regimes," Economic Journal, Royal Economic Society, vol. 93(369), pages 89-105, March.
- Thaler, Richard H & Shefrin, H M, 1981.
"An Economic Theory of Self-Control,"
Journal of Political Economy,
University of Chicago Press, vol. 89(2), pages 392-406, April.
- Buchanan, James M, 1978. "Markets, States, and the Extent of Morals," American Economic Review, American Economic Association, vol. 68(2), pages 364-68, May.
- Kliemt, Hartmut, 1986. "The veil of insignificance," European Journal of Political Economy, Elsevier, vol. 2(3), pages 333-344.
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