Chapter 8: The Rules of the Political Game
8.1 ECONOMIC VS. POLITICAL EFFICIENCY The efﬁciency concept which has been repeatedly invoked, Pareto optimality, is distinguished from productive efﬁciency, the ‘output maximizing’ property imputed to the neoclassical ﬂow–ﬂow production function (§ 4.2). Both of these efﬁciency construals may be distinguished from ‘political’ efﬁciency. The latter is understood to ‘describe the efﬁcacy of differing institutions in reducing or eliminating the incentives for participants to invest resources in rent seeking aimed to secure discriminatory advantage through majoritarian exploitation’ (Buchanan and Congleton 1998, p. 40). The balance of this book is informed by the notion that the ‘basic principle of collective political order, that of equal treatment’ (Buchanan  2000, p. 51) is both consistent with the moral equivalence of persons (§ 1.2) and politically efﬁcient (§ 7.4). The presumption is, then, that a constitutionally embedded generality or impartiality constraint militates against the resource-wasting rent seeking activity which characterizes conﬂictual or postconstitutional politics. While some might argue that political efﬁciency may be gained at the expense of Paretian optimality or efﬁciency, the logic of Chapter 6 suggests that the latter is, in fact, an indeterminate standard. Yet, even if it were supposed that ﬁrst-best Paretian optimality can meaningfully be deployed as a standard of normative appraisal, we have seen that there can be no presumption that, in the presence of ‘market failure’, the ‘government can do better’ (§ 5.2). Moreover, as has been repeatedly emphasized, the logic of social welfare theory can be deployed to rationalize...
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