Public choice and Public Interest
Konstantin Tsolov 200 044
Content
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Introduction
Public goods
Public interest theory
Public choice theory
The self-interest motive in public choices
Questions and answers
Introduction
• Market economists from the time of
Adam Smith have recognized that
government could play a wealthenhancing role in the economy by
responding to instances of market
failure.
• John Maynard Keynes introduces the
idea that the government should be
responsible for economic stability.
Public goods
• One of the essential market
defects is the inability of the
market to ensure the
production and distribution
of certain goods that serve to
satisfy socially significant
needs of individuals and
society - the so-called public
goods.
Public interest theory
• According to the public interest
perspective, policymakers identify
potential market failures and then
find a way to address them.
• Public interest theory examines
government as an institution that
seeks to maximize public well-being
or net social benefit.
Public choice theory
• Public choice studies the behavior
of voters, politicians and public
institutions as self-interested agents
and their interactions in the social
system representative for any form
of government.
The self-interest motive in public choices
• Public Choice theory assumes that
politicians and bureaucrats behave
in a self-interested manner in order
to maximize their personal
economic benefits and aims to view
governments from the viewpoint
of the bureaucrats and politicians
who make them up.
Questions
Thank you for your attention!