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EUGENE GARFIELD INSTITUTE FOR SCIENTIFIC lNFORMATIONe 3501 MARKET ST., PHILADELPHIA, PA 19104 Public-Choice Theory Brings James M. Buchanan the 1986 Nobel Prize in Economics; Nigerian Poet and Playwright Wole Soyinka Awarded the Literature Prize Number (^24) Iune 15, 1987
The road to James M. Buchanan’s Nobel Prize in economic sciences took a serendip- itous turn in the summer of 1948 through the stacks of the University of Chicago’s Harper Library. Buchanan had recently completed his PhD, was enjoying “the itn- mediate post-dissertation leisure of an aca- demic novice, ” 1 when, as he tells it,
by sheerchance1pulledKnutWicksell’s 1896[German-language]dissertationon taxationfromthe shelves,a took thatwas untranslatedand unknown. The effect on me was dramatic. Wickselllaid out before me a set of ideas that seemed to corre- spond precisely with those that I had rd- ready in my head, ideas that I could not have expressed and would not have dared to express in the public-finance mind-set of the time,... Wicksell [said] if we seek reform in economic policy, we should change the rules under which political agents or representatives act.
In discovering that the Swedish economist Wicksell had focused on the rules or first principles that shape public-finance deci- sions, Buchanan found encouragement. He set out toward the domain of political sci- ence and the realm of political deeision- making, but he took along an economist’s interest in incentives and in the concept of mutual advantage in exchanges. He saw po- litical decision-makers no longer as detached seekers of the public good, but as interested players who could be counted on to trade for their own advantages, such as reelection or increased power. Like those in the private sector, actors in the public sector will be motivated by self-interest, Buchanan said. It’s an idea as old as Thucydides,s and one reiterated by Machiavelli,d Hobbes,s and Adam Smith in that cornerstone of econom-
ics, 77se WeaMr of Nations. 15 From Smith’s time to Buchanan’s, however, this basic un- derstanding was largely forgotten. Buchanan’s formulation, known as public- choice theory, takes the “methods and ap- proaches that economists have traditionally applied to the private sector and extends [those] to the political sector, to @itics. ” For example, in the US the rules for decision-making concerning public spending are set out in the Constitution: elected rep- resentatives vote on citizens’ behalf on the amount and distribution of public timds. But these rules produce in the representatives a proclivity to spend beyond the amount of revenue collected. It is in the representa- tives’ interest to spend more and to say to their constituents that they voted for this or that project that brings benefits to their com- munity; by delivering such benefits, the rep resentatives are more likely to be reelected. They have no incentive to tell their constit- uents they voted for higher taxes in support of the many projects they deliver. Unless there is same moral or legal re- straint against this proclivity to spend with- out incrementally raising revenues, budget deficits result. Before the Keynesian views (from the mid- 1930s on) that governments should intervene in an economy to achieve certain social or economic goals, such as full employment or low inflation, there was chiefly a moral impediment to deficit spend- ing. Acceptance of Keynesian interventionist policy, in Buchanan’s view, removed this impediment and destroyed the relationship between spending and taxing in the public decision-making process. Its lieu of any moraf constraint then, Buchanan has sup- ported the introduction of a legal constraint against creating deficits.
The Gramm-Rudman-HoIlings deficit reduction actg was in part inspired by Buchanan’s ideas and is a recognition on the part of politicians that they need controls; but as a legislative fix-one that can be legislatively undone-Buchanan finds it less acceptable than a constitutional amendment to balance the budget, which amounts to changing the rules of the game. Under the requirement for a balanced budget, dollars would be so scarce in respect to demand that near unanimity would be required before fimds for a project would be approved, reasons Buchanan. Furthermore, Buchanan would want taxes earmarked for specific projects and voting on those projects to be straight up or down. Buchanan’s work lies off the mainstream of traditional economics, whose practition- ers have in the last half-century focused their energies on methods of “fine-tuning” the Great Economic Machine. But, to return to Wicksell’s Wint, Buchanan believes that it is useless for economists to offer advice on “fine-tuning,” since once the rules of the game are adopted, the outcome of a partic- ular issue is largely set by the internal dy- namics and political constellations of the system. The selection of Buchanan for the Nobel Prize elicited some surprise on the part of many traditional economists who feel that Buchanan’s work lies, in fact, outside eco- nomics. Actually, public-choice theory, by straddling economics and politicrd science, reunites these two disciplines, formerly known collectively as political economy. In the opinion of Thomas Borcherding of the Claremont Graduate School, Crdifornia, and a former student of Buchanan, the outstand- ing contribution of public-choice theory is that it has brought” ‘more reality to political science models. ~~ 10 But^ on^ the^ ecOnOmim side, Buchanan’s ideas are directly related to the concept of rational maximizing behav- ior, a focus for the research of such Nobel Prize winners as Herbert Simon (1978) and Kenneth Arrow (1972). Nevertheless, Bucnanan does feel some- what a stranger to mainstream economics, which is inundated in his view by mathemat- ical models of low utility that attempt to ex- plain market failures. “I don’t hide behind technicalities to make it appear to be a pure
science. There’s a lot of fraud foisted on or- dinary people, ” he has said in his charac- teristically outspoken manner. 11Buchanan, in this regard, sounds remarkably like Wassily Leontief, the 1973 Nobel laureate in economics. 12 Leontief, too, has com- plained loudly about the misuse of mathe- matics and statistics in economics. 13 In recognizing the importance of public- choice theory, the Nobel committee chose to honor the man most responsible for its formulation and advancement. Buchanan, however, has rdways acknowledged pio- neers, such as Wicksell, as well as a number of Italian scholars in public finance.
Early Years, Teaching Career James McGill Buchanan was born on Gc- tober 2, 1919, into a poor farming family in Murfreesboro, Tennessee. His grand- father, John P. Buchanan, a member of the Farmer’s Alliance party, was the Populist governor of the state of Temessee from 1891 to 1893. ,% Buchanan ECdk hiS child- hood, “I [grew] upon a reading diet from my grandfather’s attic piled high with the radical pamphlets of the 1890’s. The rob- ber barons were very real to me.’”2 The family had intended that he attend Vander- bilt University and follow his grandfather as a lawyer-politician, but “Vanderbilt moved beyond the possible as the Great Depression moved in.” Instead, Buchanan enrolled at Middle Temessee State Teachers’ College in Mur- freesboro. He lived at home and milked cows morning and night for four years to pay for his tuition and books. After gradu- ating in 1940 with a BS in mathematics, En- glish literature, and social science, including economics, he went on to the University of Tennessee in Knoxville and received his MA in economics in 1941. “I learned no eco- nomics during that year, but did learn about women and whiskey, which, after roll, are important parts of an education, ” he remem- hers.’2That same year, just as he was about to take a fellowship in statistics at Colum- bia University, World War II intervened and he joined the US Navy. After officer train- ing he was assigned to the operations staff of Admiral C. W. Nimitz, commander-in- chief of the Pacific Fleet. Buchanan proved
Table 1: Jemee M. Buchanan’s most-cited works from the SSCJQ, 1966-1986, A =number of citations. B =blb- Iiograpbic data.
A
922
265 244 188 166
147
131
83
83
B
Mrchmmn J M & TuIkwk G. ??recafculus of consent: logical forutoktioru of constitutional demacracy. Am Arbor, ML University of Michigan Press, 1962.361 p. ~UCtUtSISn J M. ~ &rnand and SU/@y O~pUfJfiCgaads. Chicago, IL: Rand McNsU)’, 1968.214 p, Buchanan J M & Stobblebfne W C. Extemalily. Econom”ca 29:371-S4, 1%2. Bucfmatao J M. An economic theory of clubs. Econamica 32:1-14, 1%5. Bucharmrr J M. The limits of lilwny: between anarchy omi LcviatIurm Chicago, IL: University of Chicago Press, 1975.210 p. Bucbamou J M. Public jnonce in the democratic process. Chapel Hill, NC: University of North Carolina press, 1%7. 307 p. Buchcrtarr J M & Weguec R E. Dt-rrracracy in &fcic rhe po/itica/ kgacy of Lord Keynes, New York Academic Press, 1977, 195 p. Buchamua J M & TulIock G. Polluters’ profits and political respmrse: dkcct controls versus taxes. Amer. Econ. Rev. 65:139-47, 1975. Buchanan J M, Tollfeen R D & Tuflack G, cds. Toward a theory of the rent-seeking wcieiy. College Station, TX: Texas A & M University, 19S0. 367 p.
FSgure 1: Historiogcaph of research fronts on public expenditure end taxes, political decision-making, and public ccouomics. Numbers of core/citing papers are indicated at the bntmm of each box. Asterisks () indicate fronts that include Buchanan an a core author.*
l85- 03-2111 ‘84-2098 (^) Economic 86- Economic factors Economic (^) optimizirtion in Economic and environmental management of (^) pollution environmental policy pollution^ regulation policy^ modeling 7/37 3/1 9^ 3/25 3/
83-0010 F^ 65-6270 66- Property tax (^) Property taxes I nternetional and local 64- 1--- (^) end the public trade and general governments 3/ Effects of sector^ equilibrium
. fiscal policy on 2/^ analysis 22/ 83- property taxes - and housing l 85- Public-goods 3144 Public^ choices^ 66- epproach to.^ -^ “ and local govern- Fiscal federalism economics (^) ment decisions 6/ 2/77 (^) %.s 6/ A 83- -“T Bureeucrecies in public organizations B4.^. 5/72 Public^ l 65- l 86- Public choices Public-choice bureaucratic about taxation perspectives on 83-5369 (^) organizations 2127 tax reform Party politics (^) 10/118 2/ and US public +- policy 17/
Readers interested in learning more about public-choice theory might do well to con- sult the recently published overview entitfed Regulating Government: A Preface to Con- stitutional Economics by Dwight R. Lee and Richard B. McKenzie. 15 Finally, I would mention Buchanan’s two most recently pub- fished books: Liberty, Market, and the State: Political Economy in the 1980s16 and The Reason of Rules, written with Geoffrey Brennan. 17A fidl bibliography of Buchan- an’s publications, 1949-1986, was recently published in the Scanikmavian Journal of Economics. 1s
Lkerature Nigerianpoet and playwright Wole Soyin- ka, the first black African to win a Nobel Prize in literature, faced reporters in Paris shortfy after the announcement and said, ‘‘ don’t for a minute consider that the Prize is just for me. It’s for what I represent. I’m part of the whole literary tradition of Africa. ” In the opinion of many, the richness and imprtance of that tradition had too long gone unrecognized by the Swedkh Acad- emy. In choosing Soyinka the academy Wfr addressed that neglect and focused world at- tention on a highly individualistic body of work, includlng plays, poetry, novels, and essays. Many of these focus on cultural up- heaval in modem African society, especially the conflict of native traditions with Euro- fxan influences Soyinka’s dominant themes include loyalty, self-sacrifice, death, and self-deception. His political involvements, particularly the experience of imprisonment for two years during the Nigerian Civil War, also find expression in his writings. Throughout his life, Soyinka has fiercely criticized cor- rupt politicians in his own country and in other newly independent African nations. In a recent work, A Play of Giants, he satirizes a collection of African dictators who have taken refuge together in an embassy in New York.20 A note accompanying the text mentions that the resemblance between his characters and such historical figures as Nguema of Equatorial Guinea, Bokassa of the Central African Republic, and Amin of Uganda “is only too pronounced.’ ’20(p. i)
Soyinka has afso been an outspoken critic of the apartheid policies of South Africa. in his Nobel lecture-’ ‘This Past Must Address Its Present, ” dedicated to Nelson Man- dela–the new laureate called upon the world community “either to bring [South Africa] into the modem world, into a rationaf state of being within that spirit of human partner- ship.. .or to bring it abjectfy to its knees by ejecting it, in every aspect, from humane recognition, so that it will cave in interna- lly, through the strategies of its embattled majority. ..21 mat^ tie playwright ~dress~ himself to politics will surprise no one fa- miliar with Soyinka’s saying, “The man dies in all who keeps silent in the face of tyr- amy. ”
Formative Experiences
He was km Akinwarde Oluwole Soyirtka on July 13, 1934, in Abeokuta, Nigeria. As the son of Christian parents, he was early on exposed to European influences and per- ceptions. That exposure increased when Soyinka traveled to the UK in 1954 to study English at the University of Leeds. After graduating with an honors BA in 1957, Soyinka joined the Royal Court Theatre in London as a play reader of mostly experi- mental drama. In 1960 Soyinka returned home and formed the 1960 Masks, the first English-language drama company in Niger- ia. Under a Rockefeller Foundation grant, Soyinka was a research fellow in drama at the University of Ibadan from 1%1 to 1%2. He traveled throughout Nigeria at this time and studied the folk drama of various cul- tures. This experiexe shaped his subsequent plays, which combine European staging with elements of African riturds. In 1962 he be- came a lecturer in English at the University of Ife and in 1964, a senior lecturer in En- glish at the University of Lagos. During these years Soyinka not only taught but afso produced his own plays and those of other African playwrights at theaters in both Lagos and Ibadan. In August 1967 Soyinka attempted to ne- gotiate a cease-fire and end to the Nigerian Civil War with the Ibo rebel leader Odurneg- wu Ojukwu. He went to the rebels’ seces-
Tabfe2 Wole Soyinka’s owst+ifed wurks fmm the A&HCf”, 1975- 19S6. A =nrunber of citations. B = bibliographic data.
A
75 35 34 31 26 25 19 18 17 15
B
Myth, lireroture, and the African wodd. New York: Cambridge University Press, 1976. 180 p. (essays) lle interpreters. Lmtdom Amire Deutseb, 1%5. 253 p. (novel) Season o~ononry. New York: Third Press, 1973.320 p. (novel) I&nre and other poems. Lnndon: Mettmen, 1%7. 88 p. (verse) ?Treman ded, New York: Harper& Row, 1972.317 p. (memoirs) A dance oj /he forests. London: Oxford University Press, 1963.89 p. (play) 7he road. Lundorv Oxford University Press, 1965. 101 p. (play) A shuttle in the c~r. New York: Hill and Wang, 1972. 89 p. (verse) Deoth ond the king’s horseman. London: Metfmen, 1975.77 p. (play) Ake: the years of childhood. New York: Random House, 1981. 230 p. (memoirs)
James Gibbs, Ketu H. Katrak, and Henry L. Gates published last year a comprehen- sive bibliography of Soyinka’s writings and of articles and books about his work.zb In addition to the bibliography, interested readers may wish to constdt monographs on Soyinka by Eldred D. Jones,zT Katrak,zg
and Gibbs,zg as well as the forthcoming collection of essays edited by Gates. 30
My thanks to C.J. Fiscus and David A. Pendlebury for their help in the preparation of this essay. z ,97[m*
REFERENCES
1. Buchanan J M. 3hc ccm.rrifumm of economicpdiq. (Nobel Ircmrc.) Stockholm: Nobel Foundation, 1986. 22 p. 2. (^) --—--- Bener rhsn plowin8. Banca Nauotxde tivoro @an. Rev. 159:359-75, **1986.
- Tlmcydfdes.** Jfismry of Iht FWoponnesian War. **London: Penguin, 1954.553 p.
- Mac3rk+vetff N. me** prince. Chicago, **IL: University of Chicago Press, 1985 124 p.
- Ifobbes T. ,Qviathun. Lzmdon: Csmbridge University Press, 1904532 p. 6, Smittr A. An irqumy into** the mxure and causes of the wetdth of mmonr, Indiarra@s, IN: Bobbs-Memill, (1 776) 1%1, 310 p. 7, SmJ?srry J. Nobel wuurer sees ecommics m mmrrnon smse. Washingkm Post 19 **October 19%, p, Cl; C4-5,
- Keynes J M. 77u general** theory of emp@mem, interest and money. London; Macmiflan, 1936.403 p, 9 Omnibus Budget Reconcifimion Act of 1986. US Code, **Titte 1.9, 1986 ed. (PL 99-X9, 2 I October 19S6. ) IO. Lewin R. Self-interest in politics earns a Nobel Prize Science 234:94 I-2, 1986.
- Banks H. A fstk with fhe Nobel laureate,** Forbes **138(1 l): 108- I 1, 19S6. 12, Garffeld E. Wassily LemuIef. pioneer of m+w-output analysts, Currem Contents (37) 3-12, t 5 Sepomtwr 1986.
- Lemrtief W. ~eurcticsf assttmpfions and narobserved facts Amer Econ** R?,, **6 I I-7, 1971
- Garf!dd E. Towards saernography. Cttrrenl C@nfenrs (43):3-14, 2? October 19S 15, h D R & McKenzie R B.** Regulating govemmem: a preface r. con.rriturional economtcs. Lexin8ton. MA: Lexington SC&S. 1987.192 **p.
- B“dtarrmt J M.** tibeny, rmwkrr, and I)W stare. pditicd CCOIWW m the 1980s. New York New York **University press, 1986.320 p.
- Breman G & Buchanan J M, W reason** of c&s, **Cambridge, UK Cambrid8e University Press, 1985. 153 p.
- Bibliography of Jsmes M. Bucfransn’s publications, 1949-1986, SCund.** J, Econ. **89(l): 17.37, 1987.
- Markham J M. Soyinka, Nigeriandmmaust.wins Nobel Literature Prke. New York limes 17 Ocruf%r 1986. p. Al; CM.
- Suyfnfrs W. A** ptay of giants. kmdotr Mefhuen, 1984.69 p, 2[. —. This PQ.Omrzrt dfress its present, (Nobel Irtfure. ) Stockholm: Nobel **Foundation, 19g6. 20p.
- Romarro C. Nobel laureate melds 3d World snd West.** Phikzidphia Inquirer 17 O@aber 1986. **p. [-F; 3-F.
- .%ybtka W. A** shuttle in the crypt. New York: **Hill and Wang, 1972, p. 60
- Gerard J. A Nobel Iaureste probes bis roots. New 3’0* 7imes 1 March 1987. Sec. 2H, p. I: 31.
- Soyittka W. 37te road. Lx-don: Oxford Umversiry Press, 1%5. p. IO-1. 26, Gibbs J, Katmk K H & Gates H L.** Wok Soyinla. a bibfio8raphy of prmwry and secondary sources. WeSlpOII, ~ Gme”wwd hsS, **_[986. 107 p
- Jams_** E D. The writing of Wok Soyiti. fmrrdmr Heincmsnn. 1973, 175 p. 28, Katrak K H. Wok Soyinka and modem tragedy: a M@ of dmmanc rht-ory and pracrim. Westpan, CT Greenwced Press, 19S6. 192 p. 29 Gibbs J. Wok Sqinka. New York: Mscmillan. 1986. 17 I p. ?43. Gate H L, cd. I. the house of Oshu#o: cnfiml essays o. Wolc Sqtnka. New York Oxford Umvcrsky press. (In press.)
