RSS for The control of politicians: An economic model

This paper applies economic theory to an analysis of behavior in the public sector. The model focuses on the division of interest between the public and its political representatives. The division of interest arises because the public officeholder is assumed to act to advance his own interests, and these interests do not coincide automatically with those of his constituents. The electoral process and some elements of the political structure are then analyzed as mechanisms which can be used to move the officeholder toward a position where the advancement of self-interest approximates the advancement of the interests of his constituents. In order to facilitate the analysis of political control, the theoretical model incorporates an extremely simplified version of the underlying "public interest." In section I an assumption of common tastes on private goods versus the single type of public good insures unanimous agreement among individuals on the ideal aggregate level of governmental activity. Given this unanimity, the model abstracts from differences of opinion among the public and focuses on the problem of the public's control over its political representatives. It should be stressed that the current analysis is intended to be complementary to previous work which has focused on divergent tastes for public versus private goods. Section II considers the behavior of the public officeholder in the absence of electoral control. A key element in this analysis is the existence of "political income," which, in a general model, would be derivable from pursuing governmental activities which favor consumer and producer interest groups. In the current model attention is limited to income which is derivable from over-payments to (competitive) factors of production. The potential for this type of income motivates the officeholder to press government expenditure beyond the level desired by the public. The important general conclusion is that the office holder, acting out of self-interest, will not automatically select activities in the public sector in accordance with the desires of his constituents.