London School of Economics and Political Science (LSE)

Modules

87
Public Choice and Public Management

Prerequisite – 80 Introduction to politics

This subject introduces students to the methods of public or rational choice theory and applies these methods to public organisations. The syllabus is divided into two parts, though both are closely inter-connected.

A. Rational Actors The first part introduces the methods of rational actor analysis. It considers individualism, the nature of rationality, different views of human nature in terms of egoism and altruism. It explains those methods with regard to some simple models – the Downs model of party competition and Olson’s model of collective action – and introduces very simple game theory. This part of the syllabus also examines the normative underpinnings of different approaches to public choice; together with some of the major criticisms of these theories.

B. Applications to Public Organisations. The second part of the subject concentrates upon applying rational choice to public sector organisations. It examines principal-agent problems; moral hazards in the public sector; bureau-maximising and bureau-shaping accounts of the civil service; local government structures – particularly advantages of centralisation or of fragmentation or of overlapping jurisdictions; privatisation and contracting out. The latter part also examines common-pool problems such as centrally directed versus communitarian approaches to problems, for example over-fishing, water supply and public versus private modes of transportation.