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referred to as “public choice.” The public choice approach assumes that politicians and political
life are essentially no different they markets. People are self-interested, and individual choice is
far more efficient then public or collective choice.
2.1. Federalism and Increased Democratic Efficiency
As I noted above, Buchanan believes in federalism for three reasons. First, Buchanan
believes that federalism promotes more efficient democratic decision-making. It is important to
recall that economists use efficiency as the standard in assessing social outcomes. For
democracy, efficiency means outcomes that more closely reflect citizen preferences and spend
public money more efficiently. For Buchanan federalism gives citizens governmental
competition, more input into policy making, and therefore outcomes that are far more efficient
than those achieved with a central government. One can see this clearly in his seminal work
Calculus of Consent co-authored with Gordon Tullock.
In 1962 James Buchanan and Gordon Tullock wrote the constitution of the public choice
movement – Calculus of Consent. Calculus provided a revolutionary framework for political
scientists and economists to understand government activity in the same way they viewed
markets, as potentially self-interested and imperfect. This insight, which we take for granted
today, along with their assumptions concerning collective choice, opened up a Pandora ’s Box.
Public choice scholars began to reconsider the simple routine activities of government, the
motivations of bureaucrats and politicians, and the political institutional arrangement in the U.S.
Buchanan and Tullock noted, correctly, that as the size of a political entity increases the
costs of making any decision also increase. “The expected costs of organizing decisions, under
any given rule, will be less in the smaller unit than the larger, assuming that the populations of
Convention