Research Handbook on Public Choice and Public Law

Research Handbook on Public Choice and Public Law

Research Handbooks in Law and Economics series

Edited by Daniel A. Farber and Anne Joseph O’Connell

Public choice theory sheds light on many aspects of legislation, regulation, and constitutional law and is critical to a sophisticated understanding of public policy. The editors of this landmark addition to the law and economics literature have organized the Handbook into four main areas of inquiry: foundations, constitutional law and democracy, administrative design and action, and specific statutory schemes. The original contributions, authored by top scholars in the field, provide helpful introductions to important topics in public choice and public law while also exploring the institutional complexity of American democracy.

Chapter 3: An Introduction to Social Choice

Maxwell L. Stearns

Subjects: economics and finance, public choice theory, politics and public policy, public choice


1 Maxwell L. Stearns2 I. Introduction The study of social choice grows out of a deceptively simple insight. While economic theory assumes as a condition of rationality that individuals hold transitive preference orderings (A preferred to B preferred to C implies A preferred to C), social choice reveals that the transitivity assumption cannot be extended to groups of three or more individuals selecting among three or more options through a method of unlimited majority rule (Riker 1982, 100; Stearns 1994, 1221–2). This stunningly simple insight – that the preferences of group members sometimes cycle over options such that ApBpCpA, where p means preferred to by simple majority rule – enjoys an impressive pedigree, dating to two French philosophers writing contemporaneously with the founding and constitutional framing periods in the United States (Stearns 1994, 1221–4; McLean and Urken 1992, 445, 453–5). Since the 1950s, social choice has generated a rich literature that boasts a prominent Nobel Prize in Economics for Arrow’s Impossibility Theorem, or simply Arrow’s Theorem. Perhaps more importantly for present purposes, social choice now forms the basis of a growing legal literature that studies the nature and competence of institutions, including elections, legislatures, courts, and agencies or bureaus. The legal literature relying upon social choice is rich and varied. Some scholars have relied upon social choice to advance normative proposals to change electoral voting procedures and decision-making processes in legislatures and courts. Other scholars have taken a skeptical approach, calling into question the normative foundations of social choice...

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