MAINS : Sample Notes For Public Adminstration Optional

PUBLIC CHOICE APPROACH

The Public Choice Approach is basically an application of economics to political science. Its principal contributors have been micro-economists like Buchanan, Tullock, Niskanen and Ostrom. It is essentially a state-reducing and market-expanding doctrine, justified by its view that government decision making is not based on individual citizens’ interests.

The Public Choice Approach is based on the behavioral assumptions that human beings are:-

" Individualistic, and
" Rational-economic

In other words, humans in general are utility-maximizers seeking to further their self-interest. In particular, it is true for actors in the politico-administrative spheres. Thus civil servants are selflf-aggrandizing bureaucrats interested only in expanding the activities under their charge, and increasing their departments’ budgets. Similarly the political leaders are vote seeking politicians, maximizing their votes for perpetuating their stay in power as their sole end. For this, they go on recklessly promising more and more programmes to their constituents.

The natural consequence of this is state overload or enlargement of the public sphere. In turn, this overload has following consequences:-

• The government machinery becomes unwillingly large. This calls for an increased public revenue and thereby increases the tax-burden on the citizens. Most of it is spent on maintaining the government and very little is left for actual provision of goods and services.
• In the absence of market conditions, there is no compulsion to innovate or raise quality and reduce costs. The government activities become increasingly bureaucratic, leading to inefficiency.
• A large government increases the powers of bureaucracy threatening individual liberty.
• In the absence of organizational pluralism, a citizen has no freedom of choice. This is anti-democratic.

Having this built up a case against governments, Public Choice Approach gives the following prescriptions:-

• The role of the state needs to be minimized. In particular, no role to be played in the production and distribution of goods and services, social or economic. As large a sphere of activities as possible should be handed over to the private sector, operating under the market mechanism.
• Even in those activities in which the state must keep itself, there should be multiple agencies delivering the same public good. Such kind of institutional pluralism ensures competition. If possible, even these services should be contracted out or leased to private parties.

This has the following benefits:-

• Market ensures competition. There can be as many players as warranted by demand. Such organizational pluralism is in accord with democracy, the freedom to choose, that competition also results in efficiency, innovation and price reduction. This benefits the citizens.
• Due to roll back of state, there are several benefits. The size of the government comes down and thereby, reducing the tax burden on citizenry alongwith the power of bureaucrats and politicians.
• Government can focus on regulating common goods better, providing public goods and rationally design other goods and services.
• With the cutting of all unnecessary functions, the government can concentrate on important activities like defence, law & order, and foreign policy.

CRITICAL APPRAISAL

It is a fact today that governments have become very big, even unwieldy. Several of their functions are plain unnecessary. This naturally leads to avoidable expenditure and reduce effectiveness. In this context, the call for roll-back of state by the Public Choice theorist seem correct and timely, and it finding wide acceptance too.

Public Sector Undertakings are being privatized from New Zealand to China to India, and being disinvested. Downsizing of government is accompanying a re-definition of its functions. Reducing fiscal deficit is the focal concern. Countries like USA and Germany have gone in for outright privatization, allowing the market a free play bin the economy. Australia and Singapore are shifting operating responsibilities from the central departments to specific decentralized agencies. This allows competition. Most developing countries from India to South Africa to Malaysia are undergoing structural adjustment which is only shifting the economic balance from government to the private sector. Overall the trend is towards state-minimalism.

Nevertheless, the theory has certain weaknesses for which it has been criticized:-

• It is a throwback to laissez-faire. This, we know leads to the state monopoly being substituted by the far more dangerous private monopoly.
• The market-mechanism does not automatically ensure competition. Big multi-national corporations first establish and then exploit their market dominance to eliminate other players. Citizens’ choice is thus constricted. Scandals in USA and other developed countries in private sector are not unknown.
• Market has no sympathy for those who cannot afford. This is especially a cause of concern for developing countries which have a large no. of poor, even destitute population.
• It looks like a new right ideology being propagated by the capitalist states like America to open the lucrative markets in the Third world to their rapacious trans-national companies.
• Its criticism of political leaders and civil servants as being motivated solely by self-interest is unfair.
• It forgets the important role of the state vis-à-vis the market. The state has to enforce contracts, adjudicate disputes, curb monopolies and build physical infrastructure. No market is possible without these.
• It is crudely ahistorical. In the early stages of development, a country e.g. East Timor or Afghanistan may not have any private enterprise. State is the only instrument of development there.
• The assumption about human nature- individualistic and utility-maximizers is too simplistic. Plural societies need communitarianism than self-centered individuals.
• In advocating market-led development, it prescribes "one-best way".
• To say that efficiency is the sole aim of government is to trivialize government. The latter has higher goals like equality, equity and welfare.
• The theory justifies consumption of ever increasing amounts of goods and services, and so apotheosizes the western way of life.