Table of Contents

The Elgar Companion to Public Choice, Second Edition

The Elgar Companion to Public Choice, Second Edition

Edited by William F. Shughart II, Laura Razzolini and Michael Reksulak

The Companion lays out a comprehensive history of the field and, in five additional parts, it explores public choice contributions to the study of the origins of the state, the organization of political activity, the analysis of decision-making in non-market institutions, the examination of tribal governance and to modeling and predicting the behavior of international organizations and transnational terrorism.

Chapter 26: Evolutionary public choice

Uwe Cantner and Michael Wohlgemuth

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

Extract

In mainstream economics as well as in mainstream public choice the neoclassical paradigm is clearly dominant. Almost all economics of politics nowadays applies the neoclassical model of rational choice to collective decision making (for example, Mueller 1993, p. 511). One reason for the neoclassical paradigm’s dominance over evolutionary approaches may be that the former can be much better described as a clearly defined core of basic assumptions, accepted puzzles and procedures to solve them. The neoclassical concept may be defined in one sentence such as: ‘the combined assumptions of maximizing behavior, market equilibrium and stable preferences, used relentlessly and unflinchingly’ (Becker 1976, p. 5). Evolutionary approaches are perhaps best defined as ‘dynamics first’ which implies the more or less relentless rejection of Becker’s assumptions. Maximizing representative agents are rejected in favor of boundedly rational individuals who differ in their knowledge, skills, expectations, practices and learning heuristics. The expectations and behavior of some individuals or populations can even be wholly mistaken. Static equilibrium is rejected in favor of process analysis of systems characterized by endogenous change based on the permanent creation of novelty, the competitive selection and the (often path-dependent) learning (learning from own experience) and imitation (learning from others) of potential problem solutions. And with the emergence of novelty, endogenous change and interactive learning, stable preferences become a much more critical assumption that can no longer serve as an adequate starting point in most cases (see Cantner and Hanusch 2002 or Witt 2008 for surveys of evolutionary economics).

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