1. What is public choice?

Public choice is the applying economic science to issues in political science such as party politics and the bureaucratic system, and issues in which the mechanisms of politics is related to that of economics. In the latter issue, taking into consideration that politicians will always be involved in the implementation of any economic policy, there are a wide range of applications.

Classical public choice writers, whose published works were based in the 1960s, include Buchanan and Tullock (1962), who discussed decision-making issues in society, Downs (1957), on the topic of party politics, Olson (1965), on interest groups, and Niskanen (1971), on the bureaucracy. Using this research as a starting point, public choice research has energetically developed in many directions.

Public choice has also had an influence on actual economic policy. For example, as postulated by Buchanan and Wagner (1977), Keynesian fiscal policy promoted big government and produced persistent financial deficits in actual democratic societies, earning a huge reaction from in and out of academic circles. As a result, every country has trialed various methods in order to protect fiscal discipline. Furthermore, the public choice approach has, since the 1980s, provided suggestions to many economic policy issues such as reform of regulations relating to various interests, and decentralization issues relating to central and local governments.

2. Public choice in the university curriculum

Why can we apply economic science to political science? What many students who come to the Faculty of Economics hope they can study about in economic science is not research matter related to political sciences, but business activity, public finance, money and banking, and international trade etc. But that is matter which can be researched in economic science, not economic science principles.

The principles which make the application of economic science in politics possible are methodological individualism, homo economicus, and politics as an exchange*1. Put simply, when thinking about any decision made in society, individual decision making can be thought of as the starting point. Individuals make rational decisions with political conditions in mind, in other words, out of the choices offered to reach an agreement between people, the selection which maximizes net benefit will be taken. Furthermore, the results of individual decision making are tallied by following set rules (the majority rule for example), leading to whole-society decision making. This kind of political process can be seen to be similar to market transactions in economics. The reason is, in economics, in order for consumers and producers to maximize net benefit, it is assumed that commodity transactions will take place.

In this way public choice is an application of economic science in politics but, excluding a few universities, many university faculties of economics have not installed public choice as a course subject. But, even if it hasn't been set up as a course subject, public choice has sometimes been introduced in related subjects such as economic policy, public finance, and public economics. Also, like the Faculty of Policy Studies of Chuo University, there are policy-related faculties which have opened from 1990 onwards that include public choice as a course subject.

*1 It can be claimed that voters are irrational, but countering that, Caplan's (2007) assertions can be used as reference from a public choice standpoint.

3. Change of government in the minds of faculty students

On November 6-7, 2010, the Japan Public Choice Society hosted a student meet at Takasaki City University of Economics. The student meet, which has been held every November since 1998, attracts about 300 second and third year students belonging to seminars researching public choice from the economic and policy-related faculties of various universities. There are many past participants who have gone on to become researchers.

Every year at the student meet, the Society President assigns the second and third year students a common topic for discussion which is deemed important to the times. The students submit a 40 A4-sized page essay on the topic prior to the meet, and then give a presentation on their essay, with a 20 minute time limit, at the meet. Judging of the essays and presentations is conducted in a strict manner by ten or so Society members.

In 2010, the topic for third year students was Does a change of government lead to policy change and system reform? In the summer of 2009, following the lower house general election, the Democratic Party of Japan government was formed, and the Hatoyama and Kan cabinets have tried to implement changes to policy making methods and policies, and the aim was to question the students on how they rate those efforts. Faced with this difficult common topic, the students tried to analyze it from an original perspective, with three teams, including the student team from my seminar, being given awards. Here I will introduce the award-winning teams' arguments.

Aoyama Gakuin University Faculty of Economics Masashi Nishikawa Seminar argument: As an interpretation of the topic, they recognized the situation of the times to be a regionally disparate society, and used GIS (Geographic Information System) to conduct an analysis focusing on ubiquity in medical and financial services. Results showed that, the ubiquity in medical services would not improve on that from the Liberal Democratic Party term, but on the other hand, in financial services, they came to the conclusion that with the DPJ's postal revision bill, ubiquity would improve compared to LDP times. From this they concluded that the DPJ administration will not be able to implement policy and system change in all areas.

Aoyama Gakuin University Faculty of Economics Mazuru Nakamura Seminar argument: Through their interpretation of the topic they investigated system reform resulting from a change of direction and conventional rent seeking in policies. As a result of their analysis, it was concluded that the 2009 change of government will not be able to realize such change or reform. Furthermore, in order to realize a change of direction and conventional rent seeking in policies through a change in government, a change in the election system is necessary, so they propose a change from the current small-sized electorate parallel voting system to a medium-sized electorate single vote system, and decrease authorized election campaign expenses and registration fees.

Chuo University Faculty of Economics Hirokuni Iijima Seminar argument: Their take on the topic was that a change in government should lead to change in existing policies and systems, and the reason that that hasn't been achieved with a change to the DPJ is because of the negative cycle of ambiguity of estimating the attainability of policies and incomplete brain trust reform. Taking these issues into account, for a change of government to lead to policy and system reform, they propose an empty box model with policy evaluations made by new market mechanisms, as a public policy decision making model, in order to create a second brains trust, for the party in power, that can resist bureaucratic organizations, that differ from both bureaucratic organizations and current think tanks.

In this way, analyses were conducted from different viewpoints for each issue relating to the change in government, and policies proposed. What should be noted here is that faculty students shouldn't repeatedly make outspoken complaints of initiatives taken by politicians, or criticize the bureaucracy, but calmly analyze Japan's political and economic situation, and propose concrete system plans in order to reform the current situation. Furthermore, as to system planning, they took into consideration the incentives of various related individuals because their analysis was based on (public choice and) the fundamental idea of economics.

4. As a trial of the practical application of learning

I have talked about public choice as an economic science being applied to politics, but as can be seen in law and economics, family economics, and behavioral economics, economics is interdisciplinary researched with law, sociology, and psychology as well as with politics. By positively introducing more of these results into the curriculum and making a base out of economic science principles, I think that nurturing human resources that can air their opinions in regards to real policy issues from a wide range of fields, is a practical application of learining.*2

But, it is a fact that there are obstacles when trying to implement this kind of educational program in humanities faculties of private universities. For example, to make public choice etc. an interdisciplinary research, it is necessary to learn the basic subjects in the Faculty of Economics such as economic theory, statistics, and econometrics, but these subjects, that require mathematical processing, are not popular with many students in private university humanities faculties. Accordingly, it is indispensible that we not only enrich the practical subjects for interdisciplinary research, but also further strengthen the basic subjects and close-knit connections between the two.

While it is difficult to conduct this type of interdisciplinary education, through interaction with students from other universities, every year the students in my seminar strive to steadily raise the level of research, so I would like to continue interdisciplinary education.

*2 Kawanobe (2009) associates graduate abilities with basic abilities of workers when discussing public choice educational programs.

References

• Buchanan, J. M. and G. Tullock(1962), The Calculus of Consent: Logical Foundations of Constitutional Democracy, University of Michigan Press (Translation overseen by Akihito Udagawa, Kokyo Sentaku no Riron : Goi no Keizai Ronri Toyo Keizai, 1979)
• Buchanan, J. M. and R. E. Wagner(1977), Democracy in Deficit : The Political Legacy of Lord Keynes, Academic Press (Translated by Minoru Fukazawa and Takeshi Kikuchi, Akaji Zaisei no Seikeizaigaku : Keynes no Seijiteki Isan Bunshindo, 1979)
• Caplan, B.(2007), The Myth of the Rational Voter : Why Democracies Choose Bad Policies, Princeton University Press (Translation overseen by Junichi Nagamine and Katsuyoshi Okui Senkyo no Keizaigaku NikkeiBP, 2009)
• Downs, A.(1957), An Economic Theory of Democracy, Haper & Row (Translation overseen by Seiji Furuta Minshushugi no Keizai Ronri Seibundo, 1980)
• Hiroyuki Kawanobe (2009), Kokyo Sentaku no Kyoiku Puroguramu (Public Choice Educational Programs) Kokyo Sentaku no Kenkyu (Public Choice Studies) No.53:pages 5-13
• Niskanen, W. A.(1971), Bureaucracy and Representative Government, Aldine-Atherton
• Olson, M.(1965), The Logic of Collective Action : Public Goods and the Theory of Groups, Harvard University Press (Translated by Hiroshi Yoda and Toshimasa Moriwaki Shugo Koi Ron : Kokyozai to Shudan Riron Minerva Shobo, 1983)

Related link

Hirokuni Iijima Seminar (Faculty of Economics) receives the Excellence Award at the 13th Japan Public Choice Society Student Meet.