It is easy to envisage government arising out of pristine anarchy to fulfill a collective need of the community (say, protection from a predator) or to coordinate hunting or other food-gathering activity.

This book is a revision of Public Choice II. In revising the book, I have largely retained the structure of Public Choice II – most of the material contained in that volume reappears in this one. In some cases, this has resulted in very modest changes in a chapter and in quite substantial changes in others. Several new chapters have been written to cover topics that have cropped up or increased in importance since the previous edition was written. I have also attempted to retain the same level of difficulty as the previous version. Because the literature has become continuously more theoretical and mathematical, more mathematics appears in the new material than in the previous text, and the distinction between “easy” and “difficult” sections denoted by a * has become more arbitrary. Some may question my decision not to drop more material from the previous text, where little new work has appeared, to leave more space for new material. I have chosen not to go this route because I still think of the book as a survey of all of the major topics in public choice. That little new has appeared concerning Arrow impossibility theorems in recent years does not imply that the issues raised by this work are any less important, or that they should be omitted in a basic course in public choice – or so I believe.

In the rent-seeking model of politics discussed in Chapter 15, politicians buy and sell legislation to interest groups. The legislature is a marketplace at which rents are bought and sold. Problems of bureaucratic discretion are ignored. The legislature is in complete control. In stark contrast, in the first model of bureaucracy discussed in the previous chapter, the legislature is at the complete mercy of an all-powerful bureaucracy. Both types of models are, of course, polar cases derived to illustrate certain features of the political process. In this chapter we take a further look at the relationship between the legislature and the bureaucracies charged with implementing the policies initiated in the legislature. We also consider the separate role played by the chief executive in presidential systems like that of the United States, and the role of the judiciary. We begin with a model that completely reverses the power relationship of the Niskanen bureaucracy model.

The preceding chapters have focused upon the demand side of public choice. The citizen voter's preferences determine outcomes in the public sector. Government, like the market in a pure exchange economy, is viewed simply as an institution for aggregating or balancing individual demands for public policies. Those in government, the candidates and representatives, have been depicted as single-mindedly seeking to be elected. To do so they must please voters, so that those in government are merely pawns of those outside in a competitive political system. Only in the rent-seeking literature just reviewed does one begin to obtain a glimpse of another side of government. Politicians may not live by votes alone. They, too, may seek wealth and leisure. Their preferences may impinge on the outcomes of the public sector.

When we move … away from the private concerns of the family and the business office into those regions of national and international affairs that lack a direct and unmistakable link with those private concerns, individual volition, command of facts and method of inference soon cease to fulfill the requirements of the classical doctrine. What strikes me most of all and seems to me to be the core of the trouble is the fact that the sense of reality is so completely lost. Normally, the great political questions take their place in the psychic economy of the typical citizen with those leisure-hour interests that have not attained the rank of hobbies, and with the subjects of irresponsible conversation. These things seem so far off; they are not at all like a business proposition; dangers may not materialize at all and if they should they may not prove so very serious; one feels oneself to be moving in a fictitious world.

The reduced sense of reality accounts not only for a reduced sense of responsibility but also for the absence of effective volition. One has one's phrases, of course, and one's wishes and daydreams and grumbles; especially, one has one's likes and dislikes. But ordinarily they do not amount to what we call a will – the psychic counterpart of purposeful responsible action. In fact, for the private citizen musing over national affairs there is no scope for such a will and no task at which it could develop.

The diversity in the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results; and from the influence of these on the sentiments and views of the respective proprietors, ensues a division of the society into different interests and parties.

The latent causes of faction are thus sown in the nature of man; and we see them everywhere brought into different degrees of activity, according to the different circumstances of civil society. A zeal for different opinions concerning religion, concerning government, and many other points, as well of speculation as of practice; an attachment to different leaders ambitiously contending for pre-eminence and power; or to persons of other descriptions whose fortunes have been interesting to the human passions, have, in turn, divided mankind into parties, inflamed them with mutual animosity, and rendered them much more disposed to vex and oppress each other than to cooperate for their common good. So strong is this propensity of mankind to fall into mutual animosities, that where no substantial occasion presents itself, the most frivolous and fanciful distinctions have been sufficient to kindle their unfriendly passions and excite their most violent conflicts. But the most common and durable source of factions has been the various and unequal distribution of property.

One of the most influential studies of the first stages of the social choice process has been Rawls's A Theory of Justice (1971). This book is at once a contribution to moral and to political philosophy. Rawls relies on work and results appearing in various branches of the social sciences, however, and applies his theory to several of the major issues of the day. For this reason, Rawls's work has been widely read and discussed and has had a substantial impact on the economics literature in general, and on collective choice in particular.

Rawls's theory differs from those that we have discussed up to now in its focus on the process or context in which decisions are made as much as, if not more than, on the outcomes of this process. The goal is to establish a set of just institutions in which collective decision making can take place.

This and the next four chapters explore the properties of various voting rules. These rules can be thought of as governing the polity itself, as when decisions are made in a town meeting or by referendum, or an assembly, or a committee of representatives of the citizenry. Following Black (1958), we shall often refer to “committee decisions” as being the outcomes of the voting process. It should be kept in mind, however, that the word “committee” is employed in this wider sense, and can imply a committee of the entire polity voting, as in a referendum. When a committee of representatives is implied, the results can be strictly related only to the preferences of the representatives themselves. The relationship between citizen and representative preferences is taken up later.

The unanimity rule

Since all can benefit from the provision of a public good, the obvious voting rule for providing it would seem to be unanimous consent. Wicksell (1896) was the first to link the potential for all to benefit from collective action to the unanimity rule.

In the fifty some years since the field of public choice was launched with the works of Black (1948a,b), Buchanan (1949), and Arrow(1951), it has grown tremendously in both breadth and depth. A comparison of the lengths of Public Choice published in 1979, Public Choice II published in 1989, and Public Choice III actually understates the growth of the field, since the current text leaves uncovered or only lightly covered a far greater fraction of the literature than did the one published in 1979.

The growth of the literature also reflects a growth in the number of people working in the field. This growth has been particularly conspicuous in political science. Three of the major figures in the field – Kenneth Arrow, James Buchanan, and Amartya Sen – have been awarded Nobel prizes. It would seem reasonable to conclude from these developments that the experiment of introducing rational actor models into the study of politics has been a success.

Some readers will take exception to the use of the term “medieval” to describe a phase of Islamic history. The term is borrowed from European history, where it signifies a period, the “Middle Ages,” distinguished from the “classical” one that preceded it and the “Renaissance” by which it was followed. In European history the term originally had something of a pejorative connotation – that the Middle Ages constituted a sort of valley between the peaks of classical and Renaissance culture and learning – although most historians would today describe the Middle Ages as considerably less “dark” than was earlier thought. The risks of abstracting the term from the European context that produced it, and applying it to the wholly different circumstances of the Islamic Near East, are obvious.

On the other hand, there were peculiar characteristics of the Islamic society and its religious institutions that took shape in the period between the beginning of the eleventh and the end of the fifteenth centuries. In the “Islam” which emerged over the course of these centuries are to be found various patterns of religious authority, affiliation, and relationship which distinguish it from what came before, which laid the foundation for the Islamic societies (particularly in the form of the Ottoman and Safavid empires) that followed, and which shaped the Islamic identities of those Muslims who suddenly found themselves faced with the changed circumstances of the modern period.

There were two basic patterns in medieval political life which had a profound impact on the religious life of the Muslim communities of the Near East. The first was a persistent and constantly shifting diffusion of power away from the center and towards more local and limited regimes. The central fact here was the decline in the power and authority of the cAbbasid caliphs. So much of early Islamic discourse and conflict had focused on the institution of the caliphate, yet in the Middle Period, despite moments of resurgence, its authority flickered and finally died. The jurists held a deep attachment to the office of the caliph as an integral part of the sharica; nonetheless they too were forced to confront the political realities. Toward the end of the Buyid period, the Baghdadi Shafici qadi al-Mawardi (d. 1058) wrote a treatise on the law of government, in the first chapter of which he outlined the position and powers of the caliph. His famous description is a classic treatment of the caliph as an active centerpiece of the unity of the Islamic umma, as the cornerstone of the administration of God's law, in the face of the growing political fragmentation of the medieval period. There is a certain irony here, as al-Mawardi wrote his treatise at a time when the caliphate had ceased to wield effective authority.

The master narrative of the two and a half centuries which followed the cAbbasid Revolution might be characterized as one that took the institution of the caliphate from revolution to autocracy, and thence to disintegration and the concomitant fragmentation of the umma – that, at least, was the political framework within which radical transformations in the society and religious identity of Muslims transpired. What follows is a very brief sketch of some of the political highlights of the period, from the accession of al-Saffah, the first cAbbasid caliph, to the end of the tenth century.

In 762, al-Mansur, the second cAbbasid caliph, established a new capital for the empire in Iraq. The foundation of Baghdad, which al-Mansur actually called the “City of Peace,” reflected the growing tensions between the cAbbasids and the supporters of cAli's family, who were especially strong in Kufa, the principal Muslim settlement in Iraq which had served as the cAbbasid caliphs’ first capital. In many ways the city can stand as a metaphor for the character of the Islamic empire in this period, and for its greatness. The city, like the state of which it was the capital, was an ambitious enterprise. Much of it was occupied by and organized around explicitly imperial structures – palaces, gardens, vast reception halls – with a domed room housing the caliph's throne at the very center.

There is an old and well-developed heresiographical tradition in Islam. In response to reported dicta of the Prophet to the effect that his community would ultimately fracture into seventy-three (or seventy-two – the precise number varies with the reports) sects, theologians composed extensive treatises identifying the different religious groups and their relation to what the authors identified as legitimate Islam. Of course, as Islam has generally lacked an institutional authority constituted to make definitive pronouncements about matters of religious interest, what exactly the parameters of Islamic legitimacy embrace has tended to shift with the perspective of the viewer. The very terms “heresy” and “orthodoxy” (since the former cannot exist without the latter) as they are used in the Western Christian tradition are in some ways misleading in an Islamic context. On the other hand, the flexibility of the Islamic tradition has not prevented Muslims from fervent denunciations of those who (in their view) falsely claim the mantle of Islam. Indeed, the very lack of an authoritative institutional structure has probably helped to make conflicts over issues of religious identity sharper and more intense. Those conflicts were central to the history of Islam in the first century and a half of the new religion when, as we have seen, it only gradually carved out for itself an identity distinct from those of the earlier Near Eastern monotheisms.

In a book entitled Medieval Islam: A Study in Cultural Orientation, the Orientalist G. E. von Grunebaum asserted that the difference between medieval and modern societies, in the Islamic Near East as well as in Christian Europe, could be located most clearly in the shift in the locus of social identity. In the “Middle Ages,” he said, religious affiliation was the fundamental component of an individual's outlook, and of his and others' understanding of his place in the world. Only on a secondary level would he think of himself as rooted in a local society, or bound to some local center of political power. And only as an afterthought might he think of himself as part of a larger national or ethnic community. “The gradual reversal of the strength of these loyalties,” von Grunebaum argued, “marks the close of the Middle Ages.” Like many grand themes of Orientalist scholarship, von Grunebaum's observation perhaps contains a certain truth. But it also obscures a great deal through over-simplification. As we have seen, the question of religious identity, even as late as what we have called the “Middle Period,” was in fact a complex matter, and its complexity did not evaporate in the years after its close. Moreover, as anyone who reads a newspaper in the early twenty-first century knows, it is by no means clear that, of religious, local, and national identities, the former has been relegated to a place of insignificance.

Muhammad's unexpected death in 632 threw his community into confusion, and the difficulty it had in simply surviving speaks volumes about the absence at this stage of a fully formed religious identity, or at least of the failure of that identity to claim the unremitting allegiance of many of those who had joined it. A number of points of tension surfaced, but probably no set of issues proved so contentious to Muslim posterity, or so critical in subsequent definitions of what it meant to be a Muslim, than that surrounding the question of leadership after the Prophet's death. Consequently this terrain is particularly dangerous for the historian. According to the standard Sunni account, Muhammad's friend and father-in-law Abu Bakr prevented the Medinese Muslims setting themselves up as a separate community from Muhammad's close circle of Meccan companions, and then was named through acclamation as the first caliph, or successor, of the Prophet. Shicis, however, have a different recollection, and stress a story according to which Muhammad, sometime prior to his death, identified his cousin cAli as his presumptive heir. Of course both the Sunni and Shici recollections in fact reflect the fully formed expectations of the later sectarian groups and political parties.

It is virtually certain that Muhammad had not made arrangements for the organization and leadership of his community before his death.

As we have seen, the issue of leadership was a point of serious contention in early Islamic society, so it comes as no surprise that the cAbbasid state was plagued from the beginning by disputes over the identity and legitimacy of the ruler. There was a bloody tone to these disputes, for which the cAbbasids themselves are partly responsible, since upon coming to power they set an unfortunate precedent with their slaughter of as many members of the Umayyad family as they could find. To some extent the violence was simply a product of inter- and intra-dynastic disputes, without any particular ideological significance: when al-Mansur had the chief cAbbasid propagandist and the prime organizer of the cAbbasid revolt Abu Muslim murdered, on one level he was simply removing a dangerous alternative locus of power. But the violence and the challenges to the persons and authority of the cAbbasid caliphs also had a deeply religious coloring. The bloody treatment of the Umayyads was partly the product of the apocalyptic overtones of the movement which swept the cAbbasids to power. The assassination of Abu Salama, another leading propagandist and servant of that movement, at the instigation of the first caliph al-Saffah, probably reflected lingering tensions over who the ruler should be and disappointment among some in the movement's ranks that the “chosen one from the family of Muhammad” had turned out not to be a descendant of cAli ibn Abi Talib.