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REWIEW QUESTIONS FOR PUBLIC CHOICE READINGS
Tollison, “The Economic Theory of Rent Seeking”
1. Why does rent seeking embody a social cost?
2. How do bribes differ from rent seeking?
3. Why does rent seeking generally not occur without some form of government involvement?
4. Under what conditions is rent seeking exactly dissipated? If these conditions are often invalid, why does the
model remain so popular?
Tullock, “Rent Seeking and Tax Reform”
1. How does Tullock define rent seeking?
2. Why is the distinction between harmful and beneficial rent seeking important? What are some examples of each?
3. How is it decided when rent seeking costs should or should not be included as a social cost? Do you agree with
this procedure? What are the alternatives?
4. What is the advantage to direct, rather than indirect, subsidies?
5. What is the connection between general taxes, loopholes, and special interests?
Lott, “Some Thoughts on Tullock’s New Definition of Rent Seeking”
1. How does Lott’s definition of rent seeking differ from Tullock?
2. What are some examples that would fit both Tullock and Lott’s definition?
3. What are some examples that would be counted by Tullock as rent seeking but not by Lott and vice versa?
4. Which definition do you find more compelling and why?
Coffman, “Tax Abatements and Rent Seeking”
1. Why might it not be beneficial to automatically grant tax abatements for all applicants?
2. Why would bureaucratic discretion likely lead to rent-seeking? How is this affected if discretion were removed
by requiring a fixed rule to be applied instead?
3. Why did taxi cab regulation not affect aggregate welfare when first implemented? What does this suggest as to
how rent-seeking costs can be minimized?
McChesney, “Rent Extraction and Rent Seeking in the Economic Theory of Regulation”
1. What are the different ways in which politicians reduce private rents? What implications arise from threatening
to remove these rents? Why is it in the regulator’s self-interest to threaten removal of existing rents rather than
offering to artificially create new rents?
2. How are social losses measured in the traditional (Stiglerian) model of regulation? How does the potential
forbearance of reducing rents affect estimates of the social cost of regulation?
3. Why are incumbents less likely to end protective regulation? What does this imply regarding election
contributions to incumbents and their challengers?
4. Under what conditions would firms prefer regulations that raise their costs? Why don’t they simply impose these
costs on themselves if it is beneficial?
Blais and Dion, “Are Bureaucrats Budget Maximizers?”
1. Why would a bureaucrat seek to maximize the agency’s budget? What might be some alternative goals?
2. What is the evidence for each assumption or implication of the bureaucratic model? Which tests are more
persuasive?
3. Why don’t the bureau sponsors limit the budgets they give to the bureaus? What are the arguments against this
idea?
4. Why might a bureau maintain an informational advantage over its sponsor? How can the sponsor overcome this
hurdle?
Holcombe, “Public Goods Theory”
1. Summarize the public choice critique of public goods theory.
2. Why is it thought private markets would fail to produce public goods? Describe some examples that can be used
to counter this idea.
3. Why might the government fail to produce public goods? Among the types of public goods, why does the
government produce national defense, in particular?
4. If the traditional theory of public goods is wrong, why is it still being taught?
Dowding, “Is it Rational to Vote?”
1. What is the decision theory equation for voting? Using this equation, explain why it is thought to not be rational
to vote.
2. Briefly explain the “marginalist” solution. Explain other ways to interpret or alter the voting equation so that it
becomes rational to vote.
3. Present a problem with each proposed solution.
4. What is the information cost of voting?
5. Which explanation do you find most convincing? Defend your response.
Heckelman, “The Effect of the Secret Ballot on Voter Turnout Rates”
1. Why might a secret ballot reduce the incentive to vote? What other electoral laws might affect the incentive to
vote?
2. Why is it not enough to simply compare a state’s turnout rate after adoption of the secret ballot to its turnout
rate before adoption?
3. Does the evidence support the notion that electoral laws affect turnout? What does this imply about the validity
of the calculus of voting?
4. Why were doughnuts offered to voters in the Los Angeles mayoral election? How effective was this strategy?
Anderson, Shughart, and Tollison,” Clubs and Club Goods”
1. What are the primary characteristics of club goods which distinguish them from private goods and public goods?
2. What conditions are needed to determine the optimal size of clubs?
3. How does free-riding impact the size of clubs?
4. Describe Olson’s by-product theory of collective action. What is a critique of this theory?
O’Neal, “The Theory of Collective Action and Burden Sharing in NATO”
1. Why does “exploitation of the great by the small” occur?
2. In what ways do alliances among sovereign states typically fit the assumptions of the theory of collective action?
What are some examples that violate these assumptions?
3. Early studies of the NATO alliance showed a strong relationship in accordance with the exploitation theory. How
was this determined? What explanations were given for why this relationship eroded over time? What arguments
are presented against these explanations?
4. What private goods were NATO nations pursuing? How does this impact the exploitation hypothesis? Why did
cooperation within the alliance increase over time? How is this shown?
5. What is a “uniquely privileged” group? Does NATO fit this description?
Heckelman, “Explaining the Rain: The Rise and Decline of Nations after 25 Years”
1. Summarize the theory of “institutional sclerosis”.
2. What are the three main implications from this theory?
3. What sorts of proxy measures have been used to identify the determinants of institutional sclerosis, and what is a
weakness in these measures?
4. What sorts of biases in the literature were investigated and what evidence was found? What other kinds of biases
do you think could have been investigated?
Fair, “Econometrics and Presidential Elections”
1. What economic factors are important in determining presidential vote shares? How is this determined?
2. How does the economic model for voting get updated each election? What specific changes were made after the
1992 election and why?
3. How is success of the models judged?
4. Which version of the model does Fair prefer? Do you agree?
Youde, “Economics and government popularity in Ghana” Electoral Studies 24, 2008
1. Why have African states generally not been included in studies of economic voting?
2. What arguments are given to suggest Ghana in particular represents a good test case? What are the limitations of
conducting this study in Ghana?
3. Why is it believed (prior to actual econometric testing) that economic voting is expected to occur in Ghana?
4. Summarize the empirical evidence presented for economic voting. Explain the distinction between prospective
versus retrospective economic assessment.
5. What are the implications of this study for future research?
Case, “Taxes and the Electoral Cycle”
1. What factors affect the ability for governors to get reelected? How do these factors affect gubernatorial policy?
2. How do term limits affect tax policy?
3. How does neighboring states’ policy affect tax policy and gubernatorial reelection prospects?
Franzese and Jusko, “Political-Economic Cycles”
1. Summarize the assumptions underlying the Nordhaus model of political business cycles. According to his
evidence, what factors affect the strength of election cycles?
2. What two reasons are given for why early elections occur? What are the implications regarding economic
conditions and electioneering?
3. Contrast the social costs of unemployment versus the costs of inflation, according to Hibbs. What does this imply
regarding partisan preferences and policies?
4. Summarize the evidence for partisan policies and economic outcomes.
5. Summarize the assumptions and predictions for Alesina’s Rational Partisan Theory. What are some theoretical
limitations of his model?
Berggren, “The Benefits of Economic Freedom”
1. What is meant by “economic freedom”? What are some examples as to how it could be measured?
2. What are some concerns with how the Economic Freedom Index is created?
3. What conclusions are reached regarding the importance of economic freedom for GDP, income inequality, and
other variables?
4. What additional work is suggested is needed to better understand these relationships?
Svensson, “Eight Questions about Corruption”
1. In what ways is corruption similar to taxes, and to bribery? In what ways does it differ?
2. What are some factors expected to influence the level of corruption in an economy? Explain. What factors does
regression analysis support for influencing corruption?
3. What are some proposed solutions to reduce corruption? What conditions are necessary for each of these to be
successful?
4. Why might corruption benefit, or harm, growth? What is the evidence?
Heckelman, “Aid and Democratization in the Transition Economies”
1. In what ways might aid benefit democratization, and why might aid harm democratization?
2. What are the key differences between this study and other studies of the aid—democracy relationship?
3. Does the evidence support the idea that aid enhances democracy? How robust are the results?
4. What other variables are found to consistently support democratization?
5. Which particular categories of democracy are benefitted by aid?
Heckelman and Whaples, “Are Public Choice Scholars Different?”
1. What are some propositions that economists and political scientists both agree on? What are some on which they
disagree?
2. For those in which they both agree, are there any which you do not agree with? For those in which they disagree
with each other, list one (if any) which aligns you with the economists, and one (if any) which aligns you with the
political scientists. Overall, do you find yourself agreeing more often with the majority of economists or political
scientists?
3. Are public choice scholars in general found to be more similar to economists or political scientists? What
explanation is conjectured for this finding?
Brennan and Buchanan, “Is Public Choice Immoral?”
1. Why is public choice analysis attacked as being cynical? Is this justified?
2. What are the basic underlying assumptions public choice makes regarding political agents? How do these
assumptions differ from conventional welfare economics and political science?
3. What are the consequences of public choice models for the behavior of political agents? Does public choice
modeling simply describe or actually cause changes in behavior? How might this be harmful?
4. Is it immoral to describe problems inherent in our political institutions? Why or why not?
5. What distinctions are made between the normative and positive analysis of public choice? What are the moral
values embodied in scientific inquiry?
6. It is argued that destroying illusions without offering any hope may be immoral. What hope does public choice
offer through the "constitutional perspective"?