Saturday, 23 December 2017


One of the most interesting developments in social science in recent decades has been
"public choice theory", stemming from books by Anthony Downs and Mancur Olsen
in the late 1950s and a book "The Calculus of Consent" by James M. Buchanan and
Gordon Tullock.  Buchanan was awarded the Nobel Prize in economics in 1986 for
his work in this field.  In simple terms the gist of the theory is that elected politicians
are motivated at least partly by self-interest and this may diverge from the interests
of the population which elected them- in other words, that the idea of individuals maximising
income and profit which underlies economic theory (notwithstanding the most recent
Nobel Prize-winner) applies also in the political sphere. Probably one reason the theory has
not had the attention it deserves is the name, which seems rather misleading since the
point is that the public in many cases does not have a choice.
An important way in which the theory might have been developed, but has not been, is in
regard to the proliferation of political entities and the consequent increase in the number
of jobs available to politicians and their associates (or, if one wanted to be insulting,
their hangers-on).  The latter includes not only their employees but workers in the
local media  (elections always give a boost to newspaper circulation and TV
viewing), researchers, and beneficiaries of the patronage, e.g. job-creation
schemes, which usually come with the creating of a new political organisation.
(An even more far-reaching but controversial extension might be wars-
is it possible that some wars were in the interests of the ruling elite but not of the
mass of the population?)
Advocates of devolution  (one of the main expressions in Britain is the endless pressure
for creating city Mayors) say that money will be better spent if decisions on how to
spend it are made locally.  So far as I know no serious attempt has been made to test
this claim- it is of course always possible to point to cases where public spending has
brought benefits (as well as some where it has done harm) but tests of whether devolution
of spending has improved its efficiency are lacking. Wider fiscal autonomy is not usually
proposed- devolution advocates assume that the city or region will get the same, or even
more, money from central government.  Pressure for devolution usually comes from 
 regions that are poorer than the national average.
There are a few cases where the pressure is from richer regions.  This is currently the case
with Catalonia and the North of Italy. Even in such cases the extra costs of creating a
new tier of government need to be taken into account.  Close study of this process where
devolution or separatism has been implemented would be very valuable. For example, if
if is possible to disregard the (important) non-fiscal aspects, what has been the cost of the
dissolution of the former Yugoslavia into separate states, with their own armed forces,
Embassies etc?  I was involved in writing reports on the West Indies in the 1960s when
several states had become independent, and even the cost of maintaining foreign Embassies
and United Nations representation was a significant item in their budgets (some have
since merged).  Separatists should also bear in mind that relative prosperity may change, for
example Scotland*s long-standing claims based on oil revenues have now been well and
truly (and, for practical purposes, permanently) scuttled.

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