Earlier this pandemic year, I shared a post on five great books to read first if you want to start learning about public choice economics. Looking back at that list, I’m still pleased with those selections, and think they hold up as “must-reads” for anybody with an interest in public choice. Now, I’d like to build on that list by sharing five contenders for most defining, most impactful, most essential books in public choice economics.

My focus here is on works that I’ve personally found most useful in being able to use public choice as a framework for conducting applied research. There is of course much that gets left out here, and no doubt I have colleagues working in the field of public choice who would come up with completely different lists. Those more influenced by the Rochester than the Virginia or Bloomington approaches to public choice would come up with the most different set of selections. While the Virginia and Bloomington approaches are closely linked in that they are both embedded within political economy and heavily invested in questions of constitution-building and rule formation, the Rochester approach tends to place more emphasis on modeling political coalitions and voting behavior. But that’s an over-simplification; for those interested in more detail on the relationship between these three approaches, I highly recommend William C. Mitchell’s article “Virginia, Rochester, and Bloomington: Twenty-five years of public choice and political science.”

So, with caveats in place, here are five essential books in public choice economics that belong in every library:

 

Calculus of Consent: The Logical Foundations of Constitutional Democracy

James M. Buchanan and Gordon Tullock

The theory at the core of this book is about why people form governments and how particular decisions and areas of life are deemed either in or out of the bounds of public influence. Although the dividing lines between public and private can be easily taken for granted at any particular moment in time, the answers to these questions are actually quite varied across societies and can change radically over time. The book’s approach to these fundamental questions is deeply democratic in that it roots collective action in individuals pursuing their plans and interests while remaining keenly aware of the limits of large scale collective action. This balancing act between optimism about the coordinative power of rules and skepticism about the high potential for abuse and misuse of political power, which can be traced back to the constitutional debates at the time of the American founding, is still a defining feature in public choice today. The importance of this book to the development of the field is a big part of why Buchanan won the Nobel Prize in Economics, and why Richard Wagner called Calculus of Consent the “Ur-text” of the Virginia political economy approach to public choice.

 

Bureaucracy

Gordon Tullock

This volume is actually a mash-up of two books by Tullock, The Politics of Bureaucracy and Economic Hierarchies, Organization and the Structure of Production. The vision that brings them together is the desire to understand behavior within political organizations from the perspective of those on the inside. By providing a framework for understanding political behavior as a function of what it takes to advance within a particular system, Tullock offers a way forward for those seeking to better understand the incentives and constraints facing decision makers within bureaucracies.

 

The Logic of Collective Action: Public Goods and the Theory of Groups

Mancur Olson

Olson’s enduring contribution to public choice economics is perhaps best remembered for its presentation of the free rider problem, and the implied difficulties that any group of significant size will face when trying to work together. Seeming to have a shared goal is not always enough—differences in strategy, priorities, and the trade-offs faced by individuals raise the possibility of shirking and conflict. By exploring the internal politics of groups, Olson’s Logic of Collective Action gives us another useful way to look under the surface of collective action in order to really understand the ways that what people want out of their associations—governments, unions, lobbies, corporations, NGOs, clubs—might differ from what they are likely to get.

 

Governing the Commons: The Evolution of Institutions for Collective Action

Elinor Ostrom

This book is the culminating presentation of the first thirty years of theoretical and applied research into local public goods and community problem solving by Elinor Ostrom and her colleagues in the Workshop in Political Theory and Policy Analysis. The big idea here, in a sense, is to turn Olson on his head. Instead of focusing on the ways groups might fail, Ostrom’s emphasis in this book is on the ways groups might succeed. (Though admittedly the contrast is overblown, because both find cooperation among groups to be most successful when power is scaled down to the level of local actors with the most relevant information and incentives.) In additional to providing a theoretical framework, the book catalogs extensive case studies of local populations working together to resolve seemingly insurmountable problems and analyzes them for common threads.

 

The Political Theory of a Compound Republic: Designing the American Experiment

Vincent Ostrom

This may be the least orthodox choice on the list, but in my view, Vincent Ostrom’s work here is an integral part of the big picture of public choice. In this book, Ostrom engages in a careful analysis of Alexander Hamilton’s and James Madison’s contributions to The Federalist in a return to the great question of the American founding: is it possible to design a better government through reflection and choice? Or are we doomed to the vagaries of history and tyranny? All the books above can be seen as addressing versions of this question. And it is a critically important one. Understanding what can and cannot be accomplished in a political setting is critical to avoiding missed opportunities, yes, but also the excesses of power (and the abuse, oppression, and waste that accompany them) that are the greater problem in the modern world.

 

 

These five books are essential reads for anyone wanting to get the full picture of public choice. Taken together, they represent a holistic and adaptable approach to understanding political and economic systems that takes seriously the great power of working together—for better and for worse. There are many more works that deserve a place on this list, too many more to even name here. Share your picks in the comments below and we’ll all get to reading.

 

 

Jayme Lemke is a Senior Research Fellow and Associate Director of Academic and Student Programs at the Mercatus Center at George Mason University and a Senior Fellow in the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics.

 

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