Introduction: What Is Rational Choice Th eory? 197
government with policy advice based on his intellectual labors (Buchholtz 1999,
10–41).^1
Although rational choice’s basic intellectual toolkit is centuries old, students
of public administration largely ignored it until relatively recently. Public admin-
istration was intellectually cross-fertilized with business-oriented disciplines,
such as management and organization theory, as early as the late nineteenth
century, but it was another half-century before economists began transferring
the formal theories of their home discipline to politics. With Anthony Downs’s
An Economic Th eory of Democracy (1957), and James Buchanan and Gordon
Tullock’s Th e Calculus of Consent (1962), the implications of economic theory
for the public sector could be ignored no longer. Th ese works presented an im-
mediate challenge to orthodox thinking in public administration and political
science. (Buchanan and Tullock’s work is widely considered to mark the for-
mal founding of rational choice theory.) Th e key characteristic separating these
works from traditional approaches to political and public administration theory
was their emphasis on the rational, self-interested actor. In these frameworks,
the public-spirited citizen and the neutrally competent public servant were re-
placed with the rational utility maximizer. Following Smith’s lead, citizens and
civil servants in these frameworks were not presumed to engage in political
behavior because of civic ideals or commitment to the common good; instead,
it was assumed they engaged in political behavior for the same reasons they en-
gaged in economic behavior; namely, they were motivated by a desire to benefi t
themselves.
Rational choice theory is thus anchored to the belief that the central behav-
ioral assumption of the neoclassical economic paradigm is universal: Self-interest
drives our decisions and actions, whether these are purchasing a car, voting, or
formulating a public budget. From this starting point, it is a short step to the no-
tion of markets for public services, a situation where citizen-consumers shop for
the public goods and services they most prefer, and producers of these services
are competitive organizations whose self-interest is coupled to the need for effi -
cient response to consumer demand. Th is, needless to say, contradicts orthodox
public administration notions of who should provide public services and how:
bureaucracies in centralized jurisdictions that are responsive to representative
democratic institutions rather than consumer demand.
Th is large-scale challenge to traditional thinking in public administration is
fashioned from remarkably simple theoretical tools. As outlined by Buchanan
and Tullock, there are only two key assumptions of rational choice theory. (1)
Th e average individual is a self-interested utility maximizer. Th is means an indi-
vidual knows her preferences or goals, can rank-order them, and when faced with
a set of options to achieve those preferences will choose those expected to max-
imize individual benefi ts and minimize individual costs. Th is preferred mix of
benefi ts and costs is referred to as an individual’s utility function, and Buchanan
and Tullock (1962, 32) argued that individuals will act to maximize that utility by