1968
Rational Choice Th eory
and Irrational Behavior
Introduction: What Is Rational Choice Th eory?
For public administration scholars, rational choice can be simply thought of
as neoclassical economic theory applied to the public sector. It seeks to build a
bridge between microeconomics and politics by viewing the actions of citizens,
politicians, and public servants as analogous to the actions of self-interested pro-
ducers and consumers (Buchanan 1972). Th is analogy not only makes it possible
to conceive of the public sector in market terms but also makes available to public
administration scholars a well-developed set of theoretical tools from economics.
Th e terminology for these tools varies (they are sometimes called political econ-
omy or welfare economics), but they are best known and most widely applied as
rational or public choice.
Th e intellectual roots of rational choice date back at least to the work of Adam
Smith, whose Th e Wealth of Nations (fi rst published in 1776) is the intellectual
rock on which neoclassical economic theory is constructed. Smith’s great insight
was that people acting in pursuit of their own self-interest could, through the
mechanism of the “invisible hand,” produce collective benefi ts that profi ted all
society. For example, businessmen might be motivated only by a desire to enrich
themselves, but their ability to turn a profi t depends upon producing cheaper,
better-quality goods than their competitors. Higher-quality goods at lower prices
benefi t everyone. If this is true, it implies that social order and collective benefi ts
can be produced by market mechanisms rather than by the strong centralized
hand of government. Th ese basic elements—the self-interested actor, competi-
tion among producers, and a relatively unregulated market—are the hallmarks
of neoclassical economic thought and central to rational choice theory. Although
Smith did not construct a theory of public administration, he was fully cogni-
zant of the implications of his arguments for the public sector, and oft en supplied