What is the Public Choice of Idea or Theory? Paper Example

What is the Public Choice of Idea or Theory?

Pubic choice theory is the application of economics to understand government decisions. The theory suggests that the government is made up of individuals who are in control of decisions; therefore, decisions are not governmental, but individuals elected or appointed arrive at them. Therefore, to understand the government, one has to evaluate those in government offices economize decisions, and make choices. According to Amacher & Pate (2019, Section 14.1), the public choice theory suggests that individuals with self-interest in economic decisions are those voted and are appointed to government offices and later impose their interests indirectly.

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Explain what Rent-Seeking is.

Rent-seeking is the attempt for an individual or group to attain certain privileges, which they later manipulatively use to make money Worstall (2020, paragraph 3)

How can you Combine the Ideas of Public Choice and Rent-Seeking?

Combining renting seeking and public choice give a better understanding of how the government function and how regulations are lawfully arrived at, resulting in profits. Public choice is achieved by individuals with economic self-interest and elected in government positions. In rent-seeking, people begin to seek legal privileges, which are used to gain economically. The rent-seekers, therefore, pay those in the office to gain privileges. The politicians often lobbied by rent-seekers offer help in terms of donations Worstall (2020, paragraph 4). The donations are of value to rent-seekers since by providing support and resources during campaigns, the rent-seekers are guaranteed certain lawful privileges.

Choose One Real-World Example of Combining Public Choice and Rent-Seeking to Evaluate

The United States' largest steel producer Nucor has been beneficially for the low priced natural gas for decades. The natural gas is, however, profitable when exported. However, for Nucor to maintain low purchase prices and to make of high profits in return, they did seek restriction of natural gas export through politics. Nucor , therefore, began to offer donations and resources to influence the public choice. In return, they are granted shares of wealth created by the gas-producing company as a privilege acquired through rent-seeking.

References

Worstall, T. (2020, August 6). One Benefit of Nancy MacLean's Democracy in Chains - Public Choice and Rent-Seeking Popularised. Forbes. "https://www.forbes.com/sites/timworstall/2017/08/06/one-benefit-of-nancy-macleans-democracy-in-chains-public-choice-and-rent-seeking-popularised/%232764ee496aca%20" https://www.forbes.com/sites/timworstall/2017/08/06/one-benefit-of-nancy-macleans-democracy-in-chains-public-choice-and-rent-seeking-popularised/#2764ee496aca

Amacher, R., & Pate, J. (2019). Principles of microeconomics (2nd ed.). OpenStax