Public Choice Theory

Public Choice Theory

The public choice theory posits that politicians and the general public behave in a manner that fosters their personal interests over the interests of the public. To that end, politicians are motivated by their personal interests while formulating public policies and laws (Schuster, 2018). One of the main motivations driving legislative action is the politicians’ desire to retain their income by being voted in. The desire is explicit when legislators support popular policies regardless of their soundness to get votes. Politicians leverage the public’s lack of knowledge to support popular bills that may not benefit the general public in the long run.

Rivalry and excludability characteristics are associated with private (non-public goods). A good example of a rival and excludable good is healthcare. The consumption of healthcare by one individual excludes another from consuming those healthcare services. For instance, when patients are admitted to a public healthcare facility, they occupy bed space that someone else may have occupied (Dewar, 2017). Dewar (2017) also avers that healthcare provision is uncertain to a large extent. Although some healthcare issues, such as pregnancies, may be predicted, many healthcare issues occur suddenly and quickly, hence highly unpredictable. Healthcare possesses distinct characteristics from public goods, so it is left to the private sector.

Healthcare funding management is also in the realm of the private sector to ensure there is efficiency. If the sector were to be administered through the public sector, it would likely fail due to inefficiency (Higbea & Cline, 2021). Public officials and politicians do not have a profit incentive when managing public goods; hence they may not put enough effort into ensuring these services work. The rivalry and excludability of healthcare make it a non-public good.

References

Dewar, D. M. (2017). Essentials of health economics. Burlington, Ma Jones & Bartlett Learning Burlington, Ma Jones & Bartlett Learning.

Higbea, R., & Cline, G. (2021). Government and policy for U.S. health leaders. Jones & Bartlett Learning.

Schuster, W. (2018). Public Choice Theory, the Constitution, and Public Understanding of the Copyright System. https://lawreview.law.ucdavis.edu/issues/51/5/Articles/51-5_Schuster.pdf.

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Using both your textbook and at least one other peer-reviewed source, discuss the public choice theory or model. How does it relate to rivalness and excludability?