Public Finance in Democratic Process

by Buchanan, James M.

• ISBN13: 9780865972193
• ISBN10: 0865972192
• Format: Hardcover
• Copyright: 1999-11-01
• Publisher: Liberty Fund

Summary

A monumental work that outlines the dynamics of individual choice as it is displayed in the process of public finance. Buchanan is perhaps nowhere more clearly a disciple of the great Swedish economist Knut Wicksell than he is in the underlying principles of this seminal work. Specifically, he elaborates on these three central Wicksellian themes: analysis of market failure in the provision of public goods; the insistence on conceiving policy decisions as the outcome of political processes; and, the necessity of treating the tax and expense sides of the budget as interconnected. Echoing Wicksell's antipathy to the 'benevolent despot' model of government, Buchanan lays out in this book a starting point for modern public-choice analysis. Recognising the path breaking work he is about to begin, Buchanan opens his preface by stating, "Fiscal theory is normally discussed in a frame of reference wholly different from that adopted in this book. This dramatic shift of emphasis... requires that I consider the processes through which individual choices are transmitted, combined, and transformed into collective outcomes. Careful research in this area is in its infancy, and the necessary reliance on crude, unsophisticated models underscores the exploratory nature of the work." According to Geoffrey Brennan in the foreword, "PUBLIC FINANCE IN DEMOCRATIC PROCESS is a work more hospitable to public finance orthodoxy and could be treated as an extension (albeit an important one) of the conventional approach."

Table of Contents

Foreword	ix
Preface	xiii
I. The Effects of Institutions on Fiscal Choice
Introduction	3	(8)
Individual Demand for Public Goods	11	(11)
Tax Institutions and Individual fiscal Choice: Direct Taxation	22	(22)
Tax Institutions and Individual Fiscal Choice: Indirect Taxation	44	(13)
Existing Institutions and Change: The Effects of Time in Fiscal Decisions	57	(14)
Earmarking Versus General-Fund Financing: Analysis and Effects	71	(16)
The Bridge Between Tax and Expenditure in the Fiscal Decision Process	87	(10)
``Fiscal Policy'' and Fiscal Choice: The Effects of Unbalanced Budgets	97	(15)
Individual Choice and the Indivisibility of Public Goods	112	(13)
The Fiscal Illusion	125	(18)
Simple Collective Decision Models	143	(26)
From Theory to the Real World	169	(12)
Some Preliminary Research Results	181	(34)
II. The Choice Among fiscal Institutions
The Levels of fiscal Choice	215	(12)
Income-Tax Progression	227	(16)
Specific Excise Taxation	243	(15)
The Institution of Public Debt	258	(11)
Fiscal Policy Constitutionally Considered	269	(13)
Fiscal Nihilism and Beyond	282	(21)
Index of Authors	303	(2)
Index of Subjects	305