The Buchanan Contribution

The Buchanan ContributionAuthor(s): Geoffrey BrennanSource: FinanzArchiv / Public Finance Analysis, New Series, Bd. 45, H. 1 (1987), pp. 1-24Published by: Mohr Siebeck GmbH & Co. KGStable URL: http://www.jstor.org/stable/40912092 .

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The Buchanan Contribution

by

Geoffrey Brennan

I. Introduction

The 1986 Nobel Prize in Economics was awarded to James McGill Buchanan. This was, arguably, the first occasion on which the prize has been awarded to a public finance specialist. I say „arguably" because the claim is conceivably open to contention on several fronts. First, it could be maintained, on a rather broad construction of „public finance", that earlier prize-winners qualified as public finance men. Two examples among others that might spring to mind in this connection are Samuelson and Arrow - the former because of the seminal contributions to public goods theory; the latter for his famous theorem on social welfare functions. Second, some may argue that Buchanan's own contribution is itself too broad to be restricted to the public finance rubric. Or, if not too broad, too unorthodox. Buchanan is, after all, an intellectual presence in fields as distant as political philosophy, social ethics and law. And his position within public finance has often been so fundamentally at variance with orthodox perceptions of problems and orthodox policy prescriptions that it might be doubted whether standard public finance scholars would acknowledge Buchanan as one of their own. Yet it seems clear that most of us1 are inclined to do so. More- over, we are inclined to see Buchanan's work as centred in public economics, in a way that Samuelson's and Arrow's for example are not.

Certainly, Buchanan sees himself as, first and foremost, a public economics person. As he puts it in the preface to a recent book (1980 b, p.xi): „. . . despite (my) various excursions into the territories of ethics, law, politics and philosophy ... (I am a) public-finance economist."

And while acknowledging his „. . .having been very substantially influ- enced" by his various intellectual detours, he describes the book on tax theory as „. . . a return to the fold" (1980 b, p.xi).

1 Classing myself, possibly with some poetic licence, as a „standard public finance person".



2 Geoffrey Brennan

Because Buchanan's contribution in economics and beyond has been so wideranging, and his positions on so many matters so interesting and wor- thy of discussion, it will be necessary in my own treatment here to be both selective and cursory. It has seemed natural to me in the current setting to focus on those aspects of Buchanan's work that are most centrally concerned with public economics, and to leave to other places and occasions those contributions that are more remote. This does, however, present some difficulties because Buchanan's work, although broad in scope and disci- plinary affiliation, is nevertheless very much of a piece. Indeed, a major object of my own discussion here is to point out precisely the intellectual and conceptual coherence of Buchanan's work. Consequently, although it is tempting to set on one side Buchanan's quite extensive writings on methods in economics, for example, (including the book Cost and Choice [1969 b] and the collection of articles in What Should Economists Do? [1979]) it is not entirely satisfactory to do so: Buchanan's subjectivist inclinations bear significantly on his more general normative position, and this general normative position is a crucial unifying thread in all of Buchanan's work. Equally, much of the output that is centred on political philosophy (most notably perhaps The Limits of Liberty (1975), but also parts of The Calculus of Consent (1962a) is so significant to Buchanan's public economics more narrowly conceived that it cannot satisfactorily be ignored. Nevertheless, the public economics focus I shall adopt here does involve certain emphases and a certain corresponding downplaying of particular aspects of the Bu- chanan contribution. My discussion does not, in this sense, purport to be anything like a balanced total appraisal. And I shall not discuss at all several rather specific works that focus on immediate issues - of which the diagnosis of the crisis in universities in the late sixties, contained in the book with Devletoglou Academia In Anarchy (1970b), is one notable example.

I shall begin in section II to set out what I take to be the central elements of the Buchanan normative position, a position that informs virtually all his work. This leads on fairly naturally to a discussion of Buchanan's public choice theory (Section III). At this point, I shall change tack and examine briefly Buchanan's earlier contributions to market failure theory (Section IV). I then discuss in Section V Buchanan's writings on taxation theory. Finally (in Section VI), we shall consider Buchanan's contributions to an area that has been over his life a continuing concern - the question of public debt. Section VII offers some concluding remarks.



The Buchanan Contribution 3

II. The Contractarian Constitutionalist

One of the most distinctive features of Buchanan's work is the normative/analytic position that informs it all. That position is, as Bucha- nan himself describes it, „constitutionalist-contractarian" (1977 b, p.l 1) : „constitutionalist in the sense that I recognize that the rules of order are and must be selected at a different level and via a different process than the decisions made within those rules; and contractarian in the sense that I believe that conceptual agreement among individuals provides the only benchmark against which to evaluate observed rules and actions taken within those rules."

Although as a purely logical matter the constitutionalist and contractarian aspects of Buchanan's position are conceptually distinct, they act in the Buchanan scheme very much as mutually reinforcing pieces. The „contractarian" criterion of evaluation - the Pareto criterion of conventional welfare economics - can in principle be used to evaluate policy outcomes directly. It is, however, Buchanan's view that it is „of little value" when so applied that it „. . . must be extended to classify social rules which constrain the private individual behavior" which produces policy outcomes (1962 d, p. 343). In other words, the contractarian ethic naturally leads on, in Buchanan's view, to a constitutionalist orientation. At the same time, it is clearly possible to be a constitutionalist without being a contractarian. The „natural rights" position might, for example, be construed as constitutionalist, in that it applies to „rules of the game"; but it is not to be derived from the value citizens happen to place on rights, and is therefore non- contractarian. It seems clear, however that in Buchanan's case much of the attraction of the constitutionalist orientation lies precisely in the fact that the constitutional level of analysis is relatively congenial to the application of contractarian norms. In that sense, it could be argued that the contractarian element is the more basic. It is, therefore, natural to discuss it first.

Although Buchanan's contractarianism has certain features that are strongly redolent of conventional welfare economics, Buchanan has always been extremely critical of the orthodox approach to normative policy analysis, and anxious to distinguish his own approach from it. The standard procedure in orthodox public economics has been to lay out a substantive normative position - either in the form of explicit policy goals as in the case of Musgrave's „theory of the public household", or in the form of a social welfare function as say in Samuelson's presentation of public goods theory - and then to evaluate alternative policy arrangements in that light. In some ways, this may appear to be a totally unexceptionable procedure: certainly, its candour about normative underpinnings and its attempt to distinguish



4 Geoffrey Brennan

those normative elements from purely positive analysis have traditionally been seen as significant methodological virtues. But Buchanan has been adamant that this procedure is inappropriate - that it imposes normative criteria at the wrong level. His grounds for believing this are partly normative, partly analytic and partly epistemological. We shall explore these various grounds in turn.

It is a natural feature of any policy evaluation procedure that it recogni- zes certain policies as „best" or „true" or „right". It follows that policies so recognized should prevail: it must be right to impose those outcomes. The implication is that the conceptually ideal form of institutional arrangement is the „benevolent despot" - with benevolence defined by reference to the analyst's norms. In other words, any ethical system which is defined solely over policies and/or social outcomes and which has no explicit institutional component, logically requires tyranny. Equally, if tyranny is rejected as an ideal form of political order, so must any normative system that has at its sole domain the set of possible policies and/or social outcomes (see, for example, 1962 a).

This objection to the conventional „social-welfare-function" approach is, of course, a moral objection. It is grounded in the belief that tyranny is morally unacceptable; this is manifestly a substantive moral claim, if an apparently widely accepted one. Buchanan has, however, always argued for a form of moral relativism or skepticism. His point of departure in doing so is the observation that there is a plurality of values - and more particularly, that there is no decisive test available to determine which values are „right". There is some evidence that Buchanan takes a position akin to that of Arrow2 and Downs3 and for that matter Hobbes4 in taking values to be synonymous with preferences, tastes and interests (broadly defined), along the lines that these are all equally „revealed" by the individual's behaviour in appropriately idealized market settings. The „utility function" reflects values no less than preferences or tastes. In this perspective, the plurality of values is not so much a contingent fact as it is an ineluctable outcome of scarcity5.

In any event, accepting that values do differ as a matter of fact, the question arises as to how one can possibly rank alternative states of the world without identifying one set of values - one's own, presumably - as the

2 K. Arrow, Social Choice and Individual Values, New York, 1951. 3 A. Downs, An Economic lheory oj Democracy, New York, 1937. 4 T. Hobbes, Leviathan (1651), New York, 1943. 5 The collapse of values, interests, tastes and preferences into a single category is a

move with quite extensive implications. The current context is not, however, the appropriate one for exploring them.




„true set"? For to simply apply one's own values amounts, in Buchanan's eyes, to „playing God" : it is to arrogate to oneself a moral authority that no one individual or group can legitimately claim. And this is itself morally outrageous. „Those who . . . make such claims behave immorally in a fun- damental sense: They relegate other members of the species to a value status little different from that of animals" (1977c, p. 15). In avoiding such a position, the identification of values and preferences actually helps in suggesting a possible line : the economist has at hand one familiar context in which states of the world are ranked without requiring anyone to sacrifice his values/preferences - the case of free exchange in purely private goods in a well-functioning market order.

This familiar economic text-book case of such free exchange becomes for Buchanan the paradigm of normative evaluation. The characteristic feature of that free exchange is the consent of both the trading parties to the terms. In other words, the central notion in Buchanan's normative position is the Pareto criterion, with the participants' own preferences (as revealed by actual choice) the decisive determinant of whether the agent is made „better off" in the relevant ex ante sense. Only those policy changes that can secure agreement can be identified as genuinely desirable - anything else requires the analyst to use his own personal values to trump the values of others.

The Buchanan position here is to be contrasted with other variants of Paretian, efficiency-based norms, with their focus on „optimal conditions" analysis, the measurement of welfare losses and the like. Buchanan's objections to this more mechanistic form of applying the Paretian framework seem to be in large part epistemological. Optimal conditions analysis requires one to be able to identify goods as „private" - that is, to rule out any element of spillover benefit or cost - and the measurement of welfare losses requires one to identify the location of all the relevant departures from optimality. The natural question to ask here is whether such information is accessible. In fact, it requires very much the same sort of capacity to read individuals' minds that was felt to be so objectionable in making the inter-personal comparisons of utility necessary for the general utilitarian program6. An implication is that no observed real-world market exchange can be recognized to satisfy the Paretian test: one cannot, by mere observation, rule out the possibility that individuals who are not party to the exchange may be affected in various ways. In other words, „market failure" and equally „market success" are not empirically observable phenomena. „Unless the observing economist is assumed to be omniscient, his classifica-

6 L. Robbins, The Nature and Significance of Economic Science, London, 1935.



6 Geoffrey Brennan

tion of a final position as nonoptimal can never be more than a conjectural hypothesis that is impossible to test" (1962d, p. 233) - or, one should add, to be faithful to the spirit of Buchanan's position, possible to test only by appeal to the fact of explicit agreement among all members of the relevant group.

If the only genuine instance of „free exchange" is universal consensus, then the contractarian position would seem to require an institutional arrangement in which all decisions are taken collectively under a decision- rule of unanimity. However, as Buchanan and Tullock argue in The Calculus of Consent (1962a), unanimity at this level is simply too costly in terms of decision-making costs. Everyone is given a strategic incentive to hold out for a maximal share of any gains : unanimity will be almost impossible to achieve. Put another way, unanimity appears to be „self-defeating" in that there is likely to be unanimous agreement that unanimity should not be the test for policy desirability. But this simply means that unanimity should be applied at the more abstract constitutional level at which the „rules of the game" are chosen7. The fact that rules are to apply over a significant period and hence that the citizen's particular position under the application of those rules is highly uncertain is taken substantially to reduce the natural conflict between individuals' interests and hence to make agreement much less costly to secure at the constitutional level. The line of reasoning here is very close to that used by John Rawls in defense of the „veil of ignorance" construction, though in Rawls' case the purpose is purely conceptual - unlike the Buchanan scheme, Rawls' does not necessarily involve an actual constitutional agreement.

To return to the case of market exchange, it is apparent that since we cannot recognize whether the market instantiates the Pareto criterion or not, the market becomes an appropriate institution only to the extent that it is itself chosen as an institutional form by consensual agreement. Equally, other institutional arrangements, and specifically political processes within their constitutionally assigned domains, become PARETO-approved in the relevant contractarian sense if their operation is endorsed by unanimous constitutional consent. A major issue then becomes the analysis of alternative institutions, or „rules of the game". For Buchanan, a proper application of contractarian norms leads on automatically to what has been va- riously described as „constitutional political economy" or „comparative institutional analysis". It immediately becomes clear why public choice theory is such a natural outcome of this whole perspective (a matter to be

7 Or, conceivably perhaps, at the level at which citizens unanimously agree that the consensus test should apply.




taken up in greater detail below). It is also clear why the conventional social welfare function approach is so abhorrent. For the assumption of a benevolent despot sweeps away all the institutional analysis that Buchanan insists is necessary. Application of the social welfare function simply takes no account of what Buchanan sees as essential constraints in any normative programme and crucial analytic dimensions of feasible reform. The insistence on the need for this extra analytic input (the analysis of institutions) has led some critics to accuse Buchanan of a fatal is-ought confu- sion8. This seems to me to be a mistaken charge, although Buchanan's expositions are not always totally clear on the matter. But in quite a forth- right statement about The Limits of Liberty (1975), Buchanan has this to say (1979, p. 176): „I viewed my book as basically positive analysis, with ethical content squeez- ed to a minimum. I did not want explicitly to advance my own private values; I did not want to spell out, and I refrained from doing so, just how society 'ought' to be organized. I think that my values count for no more in this respect than anyone else's. But we must all recognize, I think, that the ultimate purpose of positive analysis, conceptual or empirical, must be that of modifying the environment for choices, which must in some basic sense be normatively informed."

Buchanan's conceptual analysis is clearly normatively informed, and the essential feature of that normative informing is clearly contractarian. If Buchanan insists on more extensive positive analysis of the way institutions work and chides his professional colleagues for „normalizing" their discussions of politics, this might be interpreted rather in the way that Adam Smith might be construed to chide medieval proponents of the „just price" theory of markets. The evaluation of the market as an institutional form is a normative exercise ; but it requires as a crucial component a theory of how markets work. Buchanan makes no different a claim in relation to politics.

To say this, however, is not to accept the contractarian position. There are a number of challenges to that position some of which Buchanan has sought to answer explicitly, and it may be useful briefly to mention them here. One of the most pervasive and apparently influential has been the argument that contractarianism sanctifies the status quo. If, for example, the distribution of entitlements on the basis of which generalized exchange takes place is somehow assessed to be „unfair", the outcome of that exchange must likewise be viewed as unfair. As Atkinson9 notes in a recent

8 bee tor example à. uordon, „ine Mew Contractanans , Journal oj Political Economy, vol. 84, 1976, pp. 573-590.

9 A.B. Atkinson, „James Buchanan's Contribution to Economies", London School of Economics, Discussion Paper No. 100, London, 1986.



8 Geoffrey Brennan

appraisal of Buchanan's contribution „. . . WickselFs support for the unanimity principle was conditional on starting from a just distribution" and given the profound influence of Wicksell's work on Buchanan, it is striking that Buchanan does not apply the unanimity test in the same contingent way. Buchanan's response to this line of attack seems largely practical. He offers no normative defense of the status quo, but merely the recognition that we can, as a matter of fact, only move „from where we happen to be". Once again, however, the constitutionalist orientation is important here. Although not much emphasized by Buchanan, his logic requires the status quo to be interpreted in constitutional rather than outcome terms. That is, the status quo should not be seen as embodying the prevailing distribution of income, but rather the existing rules of the game. Changes in the distribution of income within prevailing rules are entirely consistent with maintenance of the status quo, constitutionally defined. Such prevailing rules may or may not turn out to be highly restrictive in terms of the distribution of income, depending on what those rules are. If the prevailing rules happen to be those characteristic of the modern „welfare state", with majority decision-making as the only institutional con- straint, then the status quo will be anything but conservative distributional- ly - and indeed seems likely to be altogether too unrestrictive10.

A second issue that sometimes surfaces is whether being a contractarian commits one to being some sort of moral eunuch at the level of substantive morality - that is, at the level of deciding among alternative actions or policies. This is the obverse side of the Buchanan claim that substantive morality invites tyranny: Buchanan's logic seems to imply that any kind of substantive morality would be inconsistent with contractarianism. This seems to me to be an incorrect conclusion. Rather, contractarianism involves a requirement that one's substantive values-preferences count to the same (maximal) extent as everyone else's : no more and no less. Within the bounds set by the unanimously approved institutional setting, one is fully free to pursue one's own purposes - be they private or public in nature. To be a contractarian in the Buchanan sense does not require that one forgo a substantive morality or that one be reduced to follow slavishly whatever everyone else agrees to : what it does require is commitment to the consensus rule in the choice of institutions and to the rules of conduct those institutions embody in pursuing one's particular ends. It is of the essence that at the level of in-period decision-making one can possess any „preferences" at all, including any substantive morality11.

!0 See The Reason of Rules (1985b), chapter 8, for relevant argument to this effect. 11 1 am not sure that Buchanan himself would accept this argument. And possibly

for good reason. Consider, for example, the following question : How is the contractarian to conduct herself if she finds herself strategically placed - as the economist sometimes is




There is a suggestion in Buchanan's work of a further defense of the contractarian procedure - one that is prudential and practical rather than ethical in any conventional sense. This is based on the Hobbesian view that if political life is to be anything other than perpetual warfare, we must agree on certain basic rules - without such rules we simply cannot get on with each other at all. But this is to claim that agreeing on certain rules is the most effective means of securing a desired institutional outcome, and that it is specifically more effective than, say, imposing rules by force of might - or by forming an appropriate majoritarian coalition and restricting the relevant agreement to this smaller set. The contractarian position on this view reduces to the contingent claim that one is likely to do better by opting for consensus than for coercion of some appropriate minority. It is not clear how plausible this contingent claim is. Moreover, the reasoning does not seem to have the power to obligate anyone to seek consensus at all, unless that happens to be best for the person involved - in which case, it simply cannot do the standard ethical work of persuading people to do other than what they are inclined to do. Accordingly, it may be that contractarianism is best conceived as a common element in a variety of more extensive ethical views, all of which recognize the role of agreed rules in setting the context within which those ethical views can legitimately be pursued. This leaves open in particular the possibility of a generalized libertarian stance at the level of policy - a stance to which Buchanan seems attracted, but which appears to be quite distinct logically from his contractarianism.

III. Buchanan on Public Choice

As we have emphasized, a characteristic feature of Buchanan's normative position is its constitutional focus. For Buchanan, the appropriate domain of normative analysis is the institutional framework within which individuals interact and from which social outcomes emerge. It is, specifically, /«appropriate for the economist to apply his values to policy evaluation. To do so is to fail to recognize oneself as only one of many, all of whom properly contribute to the determination of political outcomes. The political process is essentially to be viewed as just another arena within

- to offer influential policy advice, entirely within the rules of the political game? It is a moot point whether the contractarian is in any way obliged to suggest policy changes that seem most plausibly to command consensual support, or whether instead she should see herself as free to implement her substantive ethical norms, much as a participant in a market exchange is taken to be free to pursue his purposes, whatever they happen to be (and even if he senses that there may be external effects associated with his action).



10 Geoffrey Brennan

which individuals pursue their interests (broadly conceived). In this respect, political and market processes are alike. Once the rules of the game - whether political or market - are set in place, rational agents will play to win.

Accordingly, the central normative question is not : „how should I act, or vote or spend my dollars?", but rather: „what institutional arrangements are most likely to promote tolerable outcomes for me over the long haul?". This latter is the characteristic constitutionalist question. And clearly, it invites precisely the sort of analysis of political processes that public choice theory represents.

Looking back in the light of Buchanan's work, it now seems obvious that this is the question that welfare economics has really been - or ought to have been - asking. The literature on „market success" from Adam Smith to Arrow and Debreu, no less than literature on „market failure" that dominated welfare economics in the fifties and sixties, was all addressed to the question: when ought the „free" market be allowed to prevail? As Buchanan has consistently argued, this question is precisely the obverse side of another - namely, when ought the state intervene in markets? And this latter is a question that can only be answered by reference to some institutional alternative. Implicitly, some model of politics, some theory of how government works, is presumed. What Buchanan has insisted - con- tinuously - is that this model of politics must be laid out explicitly, and scrutinized with the same analytic rigour that characterizes economists' analysis of markets; and more particularly, that the „benevolent despot" model of politics is simply inadequate for such purposes. The political process cannot, in other words, be assumed to be involved in a pursuit of ideal outcomes (however the ideal is specified) : the proposition that it is so must be proven.

All this is, as I say, obvious, once seen. Yet old habits die hard, and the benevolent despot conception of politics has turned out to be a highly resilient habit. The simple point seems to need almost endless reiteration : it is illegitimate to assume that, because some institution is imperfect, it is not the best feasible. Whether that is so or not requires an evaluation of the relevant alternatives - a theory, specifically, of political processes on all fours with the economist's theory of markets. Buchanan's public choice theory is in other words to be seen as a natural result of his constitutional orientation.

Public choice theory is to be defined most generally as the application of the methods and techniques of mainstream economics to the analysis of political processes. In one sense, Buchanan's own contribution to this theory have not been particularly extensive. There are of course the analytic components of The Calculus of Consent (1962a), including specifically the



The Buchanan Contribution 1 1

over-expansion argument in connection with public expenditure provision. And there is the paper with Faith (1981 a) on a theory of „yes-no" voting, and a recent piece with D wight Lee (1986) on vote-buying. But there is no general public choice treatise in the style and with the ambitions of say, Tullock's Towards a Mathematics of Politics12 (though Buchanan's contribution to that book was considerable) or Riker and Ordeshook's Intro- duction to Positive Political Theory1* or even Downs' Economic Theory of Democracy1*.

The absence of any attempt by Buchanan to develop a general economic theory of majoritarian politics, say along the lines of an Arrow- Debreu general equilibrium theory of markets, reflects Buchanan's orientation to public choice scholarship. The notion of using public choice theory to develop a coherent, integrated „political science" of an essentially positive kind, has clearly been a major interest of some public choice scholars. But it has never been a particular interest of Buchanan's. The Bu- chanan object has always been avowedly normative: to develop a general theory of political failure to set against the theory of market failure developed by welfare economics through the fifties and sixties. It is, of course, the case that any theory of political failure presupposes some conception of how political processes work. But the identification of political failure can to a large extent proceed by the accumulation of specific insights, each with its own piece of analysis, rather than via the development of a grand theore- tical scheme - and the former has clearly been much more the Buchanan style.

Moreover, as Buchanan emphasizes in a more general methodological setting (1969a), the „science of choice" capable of predicting specific outcomes requires rather more in the way of substantive assumptions than the pure „logic of choice", from which general welfare propositions arise. And this is no less true in the case where individual choices are exercised in the collective decision-making contexts that characterize political processes as in the case of the decentralized decision-making contexts characteristic of markets. Using this terminology, Buchanan has been concerned with the logic rather than the science of political process.

A few of the more important „pieces" of Buchanan's public choice theory, so conceived, are worth mention here. The first is the proposition, central to the general thesis of The Calculus of Consent (1962a), that majority rule tends to lead to inefficiently large levels of public spending.

12 G. Tullock, Towards a Mathematics of Politics, Ann Arbor, 1972. 13 W. H. Riker and P. C. Ordeshook, An Introduction to Positive Political Theory,

Englewood Cliffs, 1973. 14 A. Downs, An Economic Theory of Democracy, op. cit.



12 Geoffrey Brennan

The argument is that, with general taxes and specific-benefit public spending, the majority will demand public spending at a level beyond that which would apply if beneficiaries had together to face the full cost of the spending activity. Specifically, the minimal majority will have to pay only one- half of the cost of the public projects that are of particular benefit to them - and hence will demand that those projects be pushed to the point where an additional dollar's spending is worth only fifty cents of benefit. Analogous- ly, in a system of n geographically localized electorates and a national tax system, each local representative will seek to push spending on projects of benefit to his own electorate to the point where the marginal benefit equals marginal cost to his electorate - or, equivalently, to the point where marginal benefit is 1/nth of marginal cost to the fisc as a whole. Richard Musgrave15 has made the claim that the implication of over-expansion does not follow from the logic of majority rule, and that one can equally deduce an analogous w«¿fer-expansion result as each special-interest attempts to secure a tax-cut at the expense of all others in the provision of pure, national public goods. But, of course, if the majority is able to secure tax relief at the expense of the minority in the provision of pure public goods, then the public goods expenditure levels will also be excessive, because the cost-share for the majority will lie below that for the minority. In general, then, it seems that the over-expansion hypothesis is reasonably robust. Musgrave's point properly interpreted suggests that the mix of public spending will tend to be inefficiently oriented towards private or semi-public goods and away from pure public goods of national scope.

The second example of Buchanan's public choice insights relates to the issue of political discount rates. It has, for example, been a traditional charge against private decision- making in market contexts that individuals take inadequate account of the future. The reasoning underlying this claim varies. It may be that, as exemplified by Pigou's charge concerning individuals' „defective telescopic faculty" in perceiving the future, that individuals are considered as irrational and that the case for public intervention depends on an overtly paternalistic argument. Or it may be that the welfare of future generations is seen to be a public good to the present generation. Or it may be that attitudes to risk are inappropriate in that they fail to distinguish between the socially relevant risk that an investment will not generate sufficient future product and the socially irrelevant risk that the certain future product will accrue to someone other than the investor. If individuals are risk-averse, then the fact that each, when „. . . he heapeth up riches" (as the psalmist puts it), „cannot tell who shall gather them", im-

15 R. Musgrave, „Excess Bias and the Nature of Budget Growth", Journal of Public Economics, vol. 28, 1985, pp. 287-308.




plies that investment will tend to be under-expanded. In all such cases, the failure of market choice to take adequate account of the future has been interpreted as providing a prima facie case for public intervention. The Buchanan claim, developed in a series of articles with Dwight Lee (1982a; 1982 b) and presented in a somewhat more general way in the most recent Brennan-Buchanan book (1985 b) is that political discount rates will tend to be higher than market ones - that public decisions will take less account of the future than private. The reason for this is that electoral periods are typically quite short relative, say, to the life-expectancy of the average individual. In a simple model of revolving coalitions, the average individual faces a probability of virtually one half of being in the majority coalition at any future election. Over any multiple of electoral periods, therefore, she can expect to be in the majority half the time. There is then only a fifty percent chance that any current public savings will be spent in her favour. The rate of return that any public savings generate will, therefore, have to be roughly twice that on private savings. Put another way, if there is any way in which current majority coalitions can raid the resources of future majority coalitions, they will tend to do so even on terms that are decidedly unfavourable.

However, some care must be taken here in specifying alternative ways in which collective decision-making might undervalue the future. Consider, for example, a current spending program which will return benefits in the future to members of the currently ruling coalition - a road built, for example, along a particular route. The alternative project forgone may be something that will return those same voters a current benefit, but there is no reason to assume that those voters will apply anything other than their private discount rate(s) in discounting future benefits. The reason for this is that the individuals have complete certainty that those future benefits will accrue to themselves - or at least, the same degree of certainty that would accrue an analogous private project.

By contrast, consider a public project that involves forgoing current benefits to produce future benefits that do not automatically accrue to the particular individuals who compose the current majority. A notable example, to be discussed in further detail below, is the generation of a fiscal surplus which can be invested and spent in future time periods. Another possible example, which Buchanan and Lee (1982 b) exploit in explaining why governments might rationally lie on the backward-bending portion of the Laffer curve, is current tax rate reductions which encourage private investment that generates increased taxable capacity (and hence increased tax revenue) only in future time periods. In this latter case, the current majority-members generate future benefits that will accrue to themselves only if they remain members of the future majority coalitions that get to



14 Geoffrey Brennan

spend the revenues generated. It is the uncertainty about benefit incidence in the future that is crucial. With this in mind, it is clear that a wide range of public saving/investment activities will be significantly underexpanded and that in this sense public discount rates will tend to be rather higher than private ones. It is perhaps worth noting further that this result seems essentially independent of the particular model of politics used: the same conclu- sions would follow in a model which views politics as a competition between rival „parties" with their own characteristic ideological commitments as in a model of cycling coalitions reflecting the interests of prevailing majority members.

These two examples of Buchanan's public choice contributions indicate what I take to be his characteristic concern with the normative properties of political institutions rather than with developing general predictive theories of politics. Buchanan's focus in this normative direction is also revealed in his attitudes to the use of the homo economicus construction in public choice analysis. In the eyes of many commentators, the assumption of rational egoism is the characteristic feature of the public choice approach to politics16. This assumption is typically justified by its claims to empirical validity. It is clear, however, that this is not the sole ground - or even the major one - on which Buchanan uses the homo economicus model. As emphasized in several places (see Brennan and Buchanan [1981 b; 1983a and 1985 b ch.4]), Buchanan's defense of the use of homo economicus in analysing political institutions is firmly rooted in „the normative purpose of economic science" to use the title of one of his articles. His conviction is that homo economicus is the appropriate model to use in order to test the „incentive-compatibility" of alternative institutions - that is, to assess the extent to which private-interested motivations are transformed by the institution into publicly profitable actions. Indeed, Buchanan concedes in one place that „. . . descriptively, there seems to be some substance in (the critics') rejection of the Homo economicus model in application to political behaviour" (1983a, p. 90). He then goes on to argue that „. . . even if the empirical claim is valid this line of criticism is not by any means decisive, provided that the purpose of public choice analysis is seen as being the comparative evaluation of alternative institutions rather than the development of purely predictive theories of political behaviour" (1983a, p. 102-103).

!6See for example D. Mueller , Public Choice, New York, 1979, and J. Quiggin, „Egoistic Rationality and Public Choice: A Critical Review of Theory and Evidence", Economic Record, vol. 63, 1987, pp. 1-21, and the popular press account of public choice theory in the wake of Buchanan's Nobel Prize.




In Buchanan's view, public choice theory as standardly practised is properly designed for the former rather than the latter task.

IV. Buchanan on Market Failure

Although much of Buchanan's interest has focussed on developing a generalized theory of political failure, he has certainly not ignored the theory of market failure. Indeed, for the traditional public finance person, Buchanan's contributions in this latter area are perhaps his best-known. These include: the well-known „Externalities" paper with Stubblebine (1962c) which, together with Coase's „social cost" article17 and Pigou's classic treatment in The Economics of Welfare^, represents the seminal contribution in the externalities literature; the „economic theory of clubs" paper (1965) from which much recent work has sprung19; Buchanan's analysis (1966) of Samuelsonian „joint supply"; the intriguing „over- expansion" note with Kafoglis (1963 a); and not least the book-length treatment Demand and Supply of Public Goods (1968). Perhaps one should also mention in this connection Buchanan's contribution to the literature on local public goods provision, which in many instances involves direct extrapolation from the inter-personal externalities case (see for example, Buchanan and Wagner (1970a) and Buchanan and Goetz (1972)).

It is clearly not manageable here to attempt to review this large output. It is, however, worth emphasizing certain of its characteristic features and its relation to other parts of Buchanan's work. In the first place, the concern with market failure alongside the public choice focus points up Buchanan's overarching interest in „comparative institutional analysis" or what he has more latterly termed „constitutional political economy". A naive faith in the workings of markets is no less a hindrance to proper comparative analysis of institutional forms than a naive faith in the workings of democratic politics - though for most of Buchanan's working life, and still outside the economics profession, the latter has been overwhelming- ly the more common problem. Indeed, as emphasized in section II above, it is the omnipresence of market failure that creates difficulties in recogniz- ing what particular policies the Pareto criterion requires and that forces the would-be contractarian to direct his attention to the constitutional level

17 R. Coase, „The Problem of Social Cost", Journal of Law and Economics, vol. 3, 1960, pp. 1-44.

'» A. u. FIGOU, lhe Economics oj Weljare, 4th ed., London, 1932. 19 See T. Sandler and J. Tschirhart, „The Economic Theory of Clubs", Journal of

Economic Literature, vol. 18, 1980, pp. 1481-1521.



16 Geoffrey Brennan

of analysis. Moreover, Buchanan has always explicitly rejected that variant of market apologetics that refuses to see the market as requiring anything in the way of institutional undergirding. On the contrary, as the discussion in The Limits of Liberty (1975) makes clear, Buchanan is a Hobbesian in his attitudes to anarchy. Whatever else, government is required to enforce the rules of the game. Equally in The Demand And Supply of Public Goods (1963), government will be required to soak up the gains from exchange that would lie unexploited in the market in the provision of public goods in the large number case. Indeed, in that book, Buchanan appeals to the presence of such exploited gains not so much to justify as to explain government provision of certain goods and services : the explana- tory enterprise clearly fails if there is not at least some - and possibly considerable - market failure. At the same time, the failure of political institutions to approach the conceptual ideal of full consensus20 means : first, that only the more extreme cases of market failure qualify as grounds for public intervention; and second, that all kinds of institutional rigidities (such as uniform taxation, for example) that would be counter-productive in the full Wicksellian world may be justifiable in the practical world of majoritarian politics.

Buchanan does, of course, retain a general predilection for market over political institutions. But the Buchanan position seems to be based much less on a heroic view of markets than a skeptical or „anti-romantic" or possibly just „realistic"21 view of politics. There is a story about the aging Maurice Chevalier, who was asked by an earnest young female reporter how he was enjoying old age. „It's not too bad", Chevalier replied „when you consider the alternative". Buchanan's views of the market seem to be very much in this Chevalier spirit.

V. Buchanan on Tax Theory

Historically, tax theory and expenditure theory in public finance emerged from very different traditions. Even now, the separate sides of the budget tend to be analysed in isolation from each other and using rather different perspectives on the whole fiscal process. Buchanan's work, like Lindahl's and Wicksell's before him, represents a view of budgetary processes as a whole. Whereas, for example, conventional tax theory tends

20 For entirely proper reasons relating to „decision-making costs", as emphasized in The Calculus of Consent (1962a).

21 Though see the discussion of Buchanan's use of homo economicus in section III above and the references there cited.




to emphasize the effects of taxes on choices among private goods (say, on leisure-effort choices, or on inter-temporal allocation of private goods), Buchanan's work focusses instead on choices between public and private goods. And this is entirely natural, given the general public choice orientation, because the political process connects up the demand and supply side of state activities. On this view, taxes are the „cost" side of what Bucha- nan insists should be viewed as „fiscal exchange" (1976a). Citizens give up resources in order to obtain valued public goods and services. Any normative justification for this activity must depend on the citizens' consent, at some level of abstraction. Moreover, at a purely positive level, the way in which the resources at stake are obtained influences the amount of goods and services provided through the fisc - that is, tax arrangements are crucial determinants of the level of public expenditures. Alternative tax systems should be evaluated - and/or particular tax rules understood - in the light of these effects.

The precise connection between tax arrangements and expenditure levels depends on how the political process works. Buchanan's tax theory can on this basis be divided into two distinct parts, distinguished by two quite different public choice models. On the one hand, there is Public Finance in Democratic Process (1966) and the „cost-share" tradition more generally22. The model that underlies this variant of tax theory is a standard median- voter type model, in which political outcomes are determined by the de- mands of citizen-voters for public expenditures. The tax system influences the precise proportions in which individuals contribute to the cost of public expenditures, and thereby the levels of those expenditures that the various individuals demand through electoral processes. To take a striking example, an excise tax on tobacco products will fall only on that minority of citizens who smoke : rational non-smokers will vote for expenditures up to the point of satiety. Since the latter group constitutes a majority, the public output will be very much larger than in the case of a uniform proportional income tax, for example. Likewise, taxes which generate smaller excess burdens in private choices will, ceteris paribus, involve larger levels of public output because the cost of public goods is lower with more efficient tax arrangements23. In addition, taxes of which taxpayers are particularly

22 See for example G. Brennan, C. Bohanon and R. Carter, „Public Finance and Public Prices: Towards a Reconstruction of Tax Theory", Public Finance I Finances Publi- ques, vol. 39, 1984, pp. 157-181.

23 This is a point that Browning makes in a rather different setting. See E. Brow- ning, „The Marginal Cost of Public Funds", Journal of Political Economy, vol. 83, 1976, pp. 383-298, and „A Hidden Welfare Cost of Taxation", National Tax Journal, vol. 30, 1977, pp. 89-90.



1 8 Geoffrey Brennan

conscious tend to generate lower expenditures ceteris paribus than taxes which are more covert. Fiscal illusion is therefore an important topic in Buchanan's approach. By contrast, in much orthodox tax theory, fiscal illusion is largely ignored and arguably irrelevant: it is the actual effects on efficiency and equity, not the perceived effects, which are relevant to the normative evaluation of alternative taxes in the standard framework. In short, the Buchanan approach to taxation as illustrated in Public Finance in Democratic Process (1966) is quite different in focus from conventional tax analysis. As Buchanan states in the introduction to that book, his object is to view tax arrangements through a „different" window.

One of the characteristic features of this Buchanan perspective is that tax arrangements are not to be viewed as just another area of public policy, like public health or sewerage or defense or higher education. The tax structure, because it determines the prices that individual citizens face for public goods and services, is to be seen rather more as a piece of the institutional fabric, such as majority rule or restrictions on the domain of public activity, than as a project to be decided on within that institutional fabric. Accordingly, the tax system should be afforded quasi-constitutional status (Brennan and Buchanan [1983b]). It should be treated as part of the rules of the political game rather than as a particular play within the political game.

In more recent work on taxation - most notably in The Power to Tax (1980b) - this constitutional orientation is retained, though the model of politics assumed is rather different. Instead of conceiving of politics as a process solely for the aggregation of citizen preferences, government is assumed to possess genuine power to govern. Government is no longer simply a cipher for the median voter, but operates as an independent agent largely unconstrained by electoral proceedings. It is as if the „benevolent dictator" model of conventional normative theory is met halfway: the assumption of dictatorial powers is retained, while the assumption of benevolence is dropped. Within this so-called „Leviathan" framework, restrictions on the government's power to tax are secured via elements of the fiscal constitution directly, rather than indirectly via the constraints of electoral competition. The assumption is made here, as in standard monopoly theory, that any power enjoyed by Leviathan will be exploited to the maximum possible extent. Accordingly, all taxes will be levied so as to secure maximum revenue. The rational citizen at the constitutional level will on this basis assign tax bases and rate structures to government so that when exploited to their maximum revenue limits, the citizen will obtain the level of public goods and services that he desires - a level that clearly depends on the price in terms of Leviathan surplus he expects to pay. The significant point to be drawn from this model from the tax viewpoint is that broader-




based taxes are not necessarily desirable : at some point, increased broadness of base carries the power to tax beyond its constitutionally calculated limits. The Leviathan perspective points in quite a different direction from the orthodox approach here : within the orthodox approach, with its characteristic equi-revenue method, broadness of base is almost universally a virtue. Perhaps because of the somewhat cynical model of democratic politics employed, and perhaps because of the capacity to turn many of the standard desiderata on their head, the Leviathan approach to tax theory has proven quite controversial24. At the very least, however, the effects of „tax reform" on government's capacity to raise revenue and thereby on potential and actual expenditure levels represent an object of normative relevance. The equi-revenue methodology of tax orthodoxy, although ana- lytically convenient for certain purposes, is not necessarily particularly plausible and serves to sweep away one crucial dimension in the evaluation of alternative tax systems.

VI. Buchanan on Public Debt

Buchanan's first major full-length work was his Public Principles of Public Debt (1958) and he has retained a major interest in this topic through- out his career. In some ways, tracing his thinking on this issue from its origins through the more public-choice oriented Democracy in Deficit (1977a) to his most recent writings is a revealing exercise. Although there is some change in focus, the overwhelming impression is one of remarkable consistency and coherence.

Buchanan's central message here is that public debt matters. It matters because any departure from the pre-KEYNESiAN fiscal morality of balanced budgets openly invites current governments (or majority coalitions or generations) to spend at the expense of their future counterparts. Buchanan sees the Keynesian revolution (and possibly contemporary macroecono- mics no less) as having removed a well-founded prejudice against deficit financing. This it has done in either of two ways : first, by claiming that deficit financing doesn't matter, so that any apparent costs of deficit financing are ultimately illusory; or second, by arguing that deficit financing is „required" by governments for the responsible management of the macroeconomy, so that the benefits of access to deficit financing are consid-

24 See, for example, Musgrave for a well-argued critique: R. A. Musgrave, „Levia- than Cometh: Or Does He?", in H. Ladd and H. Tideman (eds.), Tax and Expenditure Limitations, Washington, 1981.



20 Geoffrey Brennan

érable25. Buchanan has seen his task clearly as combatting both lines of argument.

In Public Principles (1958) his chief object was to refute the then predo- minant „real resources" view of public debt. This view held that since spending activities, however financed, involve using up current resources, any real burden must be borne in the current period. Buchanan's critique of this view was based on the argument that current bond-purchasers who release the resources used up in current spending, cannot properly be said to bear any burden (currently or otherwise) since they give up resources entirely voluntarily. Accordingly, the burden of the debt must be borne by future taxpayers, when the responsibility to service and redeem the debt is laid upon them involuntarily. The central difference between debt and taxes in the Buchanan view is then the inter-temporal shift in burden from current to future taxpayers: public debt represents a legal obligation to raise tax revenues in excess of spending levels in the future.

The more recent neo-RiCARDiAN thrust26 attempts to establish the irrele- vance of debt financing by arguing that rational taxpayers will simply adjust their inter-temporal consumption patterns in the light of the temporal pattern of taxes. Debt financing implies lower taxes now in return for higher taxes in the future. But this will simply induce taxpayers to save more now in order to meet their future tax commitments. The intertemporal pattern of consumption will remain unchanged. Any current public debt will be exactly offset by increases in current savings designed to meet the future taxes that debt implies when those taxes are imposed. In this Barro world, public debt is relevant only at the „second-order" level of smoothing the tax rate profile over time so as to minimize the present value of leisure- effort distortions. Once again, however, Buchanan rejects the extreme assumptions necessary to generate the Barro result (see Brennan and Buchanan (1980a) for example). Buchanan emphasizes the importance of debt illusion (as did Ricardo). He notes the fact that debt permits individuals to leave a negative estate which some may wish to do. And he emphasizes the role of intertemporal tax rate differentials in inducing sub- stitution effects between current and future spending. In the Buchanan view, it is not that debt financing cannot affect individuals' net con-

25 These lines of reasoning are, of course, mutually exclusive. If debt financing has no effects, it can have no advantages. However, it is logically possible that the pre- Keynesian anxieties about debt financing were ill-founded, even though debt financing does have desirable effects in other ways.

26 R. Barro, „Are Government Bonds Net Wealth?4', Journal of Political Economy, vol. 82, 1974, pp. 1095-1417.




sumption-savings choices, and hence potentially the macroeconomy. The problem is rather that there is no reason to believe that access to debt-financing will induce political processes to generate policies oriented towards a more stable macroeconomy. On the contrary, access to debt- financing assigns to the current government the capacity to raid the tax resources of future governments. Any current government will rationally exploit that power to the point where a dollar's worth of current spending is equal to the expected future cost to its constituency of the taxes required to service and redeem the debt. Because that constituency is only a subset of the total policy, political pressures lead almost inexorably in Buchanan's view to excessive deficit-spending. Accordingly, given the erosion of the morality of fiscal conservatism that prevailed before the New Deal, Bucha- nan has become a vigorous exponent of constitutional restrictions to secure a balanced budget. For Buchanan, policies oriented towards macro- stability - exactly like policies oriented towards efficiency or equality - emerge, if they do at all, as an incidental feature of the rules of the political game. It cannot simply be assumed that government will aim to preserve monetary stability and maximize employment levels. Whether they will do so depends on the nature of electoral and other constraints. If governments are granted access to debt financing, they will have little political incentive to use that debt power to promote sensible macro-policies. On the contrary, access to debt seems entirely inimical to efficient fiscal operations.

Here, then, are arrayed a number of characteristic Buchanan themes: an antipathy to the „benevolent despot" fiction; a concern with the rules of the political game, and how these are altered when constraints are eased; the application of some simple public choice insights ; and an appeal to the constitutional level of discourse (in this case quite literally) to secure the appropriate remedies. There is, overall, a clear commitment to normative theorizing rather than descriptive analysis. Characteristically, however, that normative theorizing takes place at a more abstract level than in the standard normative analysis, with its emphasis on immediate policy advice.

VII. Conclusion

The object of this paper has been to provide a summary of James Buchanan's contributions to public economics. This has involved a somewhat narrow focus on Buchanan's work - certainly narrower than the extensive excursions into political theory, jurisprudence and moral philosophy, invite. Yet even with the narrower focus I have adopted, there is one feature of the work that is conspicuous, and this is its overall intellectual coherence. Buchanan's subjectivism, his market-failure analysis, his



22 Geoffrey Brennan

contractarianism, his public choice theory, his „constitutional" orientation - all these are parts of a single, overarching world- view. The pieces connect almost uncannily. And this is all the more remarkable because Buchanan is not the sort of scholar who appears to feel himself in any way bound by what he has said previously. Tony Atkinson in an analogous discussion of Buchanan's work27 makes a similar observation in connection with an early Buchanan article (1949), which he remarks „. . .sets out [the Bucha- nan] position with great clarity: indeed, it reads like a manifesto of his life's work." Whatever one makes of Buchanan's particular views, and whether one ultimately finds his constitutional-contractarian ethic persuasive or not, it is difficult to deny that the whole Buchanan intellectual scheme has a breadth of scope and a coherence which is utterly impressive. In the final analysis, it is perhaps the scale of Buchanan's contribution as much as its imaginativeness and creative intelligence that sets it apart. The 1986 Nobel Prize was awarded, as the citation has it, „for a synthesis of the theories of political and economic decision-making". What other living economist could be seen as tackling a task of such enormity? As Buchanan would be the first to acknowledge, the task is not yet complete. Nevertheless, it is Buchanan who has shown us that such synthesis is possible. He has developed a framework within which it can be pursued, and has carried us a vast distance along the road. It is perhaps idle to speculate on future intellectual history, but I suspect that one hundred years hence Buchanan's influence on social theory will be seen to have been profound and that he will be remembered as an intellectual figure long after many of his fellow-laureates have been forgotten.

27 A. B. Atkinson, „James Buchanan's Contribution to Economics", op. cit.




Selected Bibliography of Publications by James McGill Buchanan

„The Pure Theory of Public Finance: A Suggested Approach", Journal of Political Economy, vol. 57, 1949, pp. 496-505 „Federalism and Fiscal Equity", American Economic Review, vol. 40, 1950, pp. 583-599 „Knut Wicksell on Marginal Cost Pricing", Southern Economic Journal, vol. 17, 1951, pp. 173-178 „Social Choice, Democracy and Free Markets", Journal of Political Econo- my, vol. 62, 1954, pp. 114-123 (1954a) „Individual Choice in Voting and the Market", Journal of Political Econo- my, vol. 62, 1954, pp. 334-343 (1954 b) Public Principles of Public Debt, Homewood, 1958 „Positive Economics, Welfare Economics and Political Economy", Journal of Law and Economics, vol. 2, 1959, pp. 124-138 Fiscal Theory and Political Economy, Chapel Hill, 1960 The Calculus of Consent: Logical Foundations of Constitutional Democracy, Ann Arbor, 1962 (1962 a) „Politics, Policy and the Pigovian Margins", Economica, vol. 29, 1962, pp. 17-28 (1962 b) „Externality" (with W. C. Stubblebine), Economica, vol. 29, 1962, pp. 371-384 (1962c) „The Relevance of Pareto Optimality", Journal of Conflict Resolution, vol. 6, 1962, pp. 341-354 ( 1962 d) „A Note on Public Goods Supply"(with M. Kafoglis), American Econo- mic Review, vol. 53, 1963, pp. 403-414 (1963 a) „The Economics of Earmarked Taxes", Journal of Political Economy, vol. 71, 1963, pp. 457-469 (1963 b) „An Economic Theory of Clubs", Economica, vol. 32, 1965, pp. 1-14 Public Finance in Democratic Process, Chapel Hill, 1966 The Demand and Supply of Public Goods, Chicago, 1968 „Is Economics the Science of Choice", in Erich Streissler (ed.), Roads to Freedom: Essays In Honour of F. A. Hayek, London, 1969, pp. 47-64 (1969 a) Cost and Choice. An Inquiry in Economic Theory, Chicago, 1969 (1969 b) „An Efficiency Basis for Federal Fiscal Equalization (with R. Wagner), in J. Margolis (ed), The Analysis of Public Output, New York, 1970, pp. 139-158 (1970a) Academia in Anarchy. An Economic Diagnosis fwith N.E. Devlettoglou, New York - London, 1970 (1970b) „Efficiency Limits of Fiscal Mobility" (with C. Goetz), Journal of Public Economics, vol. 1, 1972, pp. 25-43



24 Geoffrey Brennan

The Limits of Liberty, Chicago - London, 1975 „Taxation in Fiscal Exchange", Journal of Public Economics, vol. 6, 1976, pp. 17-29 (1976a) „Barro on the Ricardian Equivalence Theorem", Journal of Political Econo- my, vol. 83, 1976, pp. 337-342 (1976b) Democracy In Deficit: The Political Legacy of Lord Keynes (with R. Wag- ner), New York, 1977 (1977 a) „A Contractarian Perspective on Anarchy", Freedom in Constitutional Con- tract, College Station, 1977, pp. 11-24 (1977b) „Politics And Science", Freedom in Constitutional Contract, College Sta- tion, 1977, pp. 64-77 (1977c) „Towards a Tax Constitution for Leviathan" (with G. Brennan), Journal of Public Economics, vol. 8, 1977, pp. 255-274 (1977d) „Tax Instruments as Constraints on the Disposition of Public Revenues" (with G. Brennan), Journal of Public Economics, vol. 9, 1978, pp. 301-318 What Should Economists Do?, Indianapolis, 1979 „The Logic of the Ricardian Equivalence Theorem" (with G. Brennan), Finanzarchiv, N. F., vol. 38, 1980, pp. 4-16 (1980a) The Power to Tax: Analytical Foundations of a Fiscal Constitution (with G. Brennan), New York, 1980 (1980b) „Towards a Theory of Yes-No Voting" (with R. C. Faith), Public Choice, vol. 37, 1981, pp. 231-245 (1981a) „The Normative Purpose of Economic Science" (with G. Brennan), Inter- national Review of Law and Economics, vol. 1, 1981, pp. 155-166 (1981b) „Tax Rates and Tax Revenues in Political Equilibrium" (with D. R. Lee), Economic Inquiry, vol. 20, 1982, pp. 344-354 (1982 a) „Politics, Time and the Laffer Curve" (with D. R. Lee), Journal of Political Economy, vol. 90, 1982, pp. 816-819 (1982b) „Predictive Power and the Choice among Regimes" (with G. Brennan), Economic Journal, vol. 93, 1983, pp. 89-105 (1983 a) „The Tax System as Social Overhead Capital : A Constitutional Perspective on Fiscal Norms" (with G. Brennan), in D. Biehl, K. Roskamp and W. Stolper (eds.), Public Finance and Economic Growth, Michigan, 1983, pp. 41-54 (1983b) Liberty, Market and State: Political Economy in the 1980s, Brighton-New York, 1985 (1985 a) The Reason of Rules fwith G. Brennan), New York, 1985 (1985b) „Vote-buying in a Stylized Setting" (with D. R. Lee), Public Choice, vol. 49, 1986, pp. 3-15



The Buchanan Contribution

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