At NPR’s Planet Money, Quoctrung Bui has put together an attractive and interesting data visualization on real income growth in the United States. As he describes it, there are two distinct eras for income growth since...
- The Tax Policy Blog
- William Niskanen: Pioneer in Public Choice
William Niskanen: Pioneer in Public Choice
Cato informs us of the very sad news that Bill Niskanen has passed away. While he served in many roles, including chair of Reagan's Council of Economic Advisors, he is best known among economists as an early contributor to public choice, which is the application of the economic way of thinking to political behavior.
Prior to public choice, modern economists treated government as a black box. The role of economists had been reduced to identifying market failure and offering a government solution, however, without any regard to government failure. Niskanen, and a small group of researchers including James Buchanan and Gordon Tullock, set about to change that. Among other accomplishments, Niskanen developed one of the standard models of bureaucracy, in which the main goal of bureaucrats is to maximize their budget.
The following is from an article that Bill wrote for the Tax Foundation in 1971, regarding the incoherence of the federal budget process:
"Governments, however, do not face the conditions that make the economic calculus and good accounts relevant to a business firm. There is no objective valuation of the output or measurement of profits. In addition, there is no frequent objective indication of the overall performance. A government, in effect, is a non-profit monopoly that provides services to its members at a zero price, is financed by lump-sum charges, and makes its budget decisions on the basis of information about cash disbursements and the anticipated vote of the members. New methods for government budgetary choices, to be valuable, should focus on these unique characteristics of government."
Subscribe to the Tax Foundation Newsletter
We will never sell or share your information with third parties.
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.