Public Governance and the Classical-Liberal Perspective: Political Economy Foundations.

• Author: Plante, Jonathan W.

Public Governance and the Classical-Liberal Perspective: Political Economy Foundations

Paul Dragos Aligica, Peter J. Boettke, and Vlad Tarko

New York: Oxford University Press, 2019, 280 pp.

Classical liberal doctrine is often conflated with the "laissez-faire" perspective that advocates for a larger market sphere and a smaller government sphere. That conflation, however, neglects the work of classical liberal scholars such as Friedrich A. Hayek and James M. Buchanan, who both spent a great deal of their careers investigating the economic and political institutional arrangements--and the social-choice processes governing those institutions--that engender a prosperous and free society. In fact, Hayek and Buchanan both posited that governments had institutional superiority over the market for some collective-choice issues. Furthermore, classical liberal scholars did not simply complete their analysis with a market-or-state dichotomy. They recognized that, in the real world, the lines between markets are "fuzzy" and often overlap. Moreover, the market-or-state dichotomy neglects the "third sector," civil society, which also needs to be analyzed and compared.

The writings of Hayek, Buchanan, and other classical liberals are often missed or misinterpreted, leaving the classical liberal position on public governance unknown, unarticulated, and understudied. In their book Public Governance and the Classical-Liberal Perspective: Political Economy Foundations, Paul Dragos Aligica, Peter J. Boettke, and Vlad Tarko seek to fill this gap in the literature by synthesizing the work of the aforementioned scholars and others in order to articulate a theory of public governance in the classical liberal perspective. The authors do so in three parts.

Part I aims to present the basic "building blocks" of public governance that are exegetical with classical liberalism: governance theory, applied governance theory, and institutional design principles. These building blocks serve as a foundation for the latter two parts, so a summary of them is warranted.

The first building block consists of governance theory elements: normative individualism, skepticism of social aggregate functions, and comparative institutional analysis. The authors explain how each of these three components reinforces each other, once analyzed. Normative individualism places a normative emphasis on the individual being the correct unit of analysis and is skeptical of social aggregate functions, a skepticism most famously posited by a scholar who didn't identify as a classical liberal, economist Kenneth Arrow. Arrow's "Impossibility Theorem" stated that individual preferences could not be collectively aggregated through democratic procedures. Therefore, since individual preferences cannot be aggregated, individual preferences ought to be the focus, which is what normative individualism holds. Moreover, using public choice's emphasis on "behavioral symmetry," the authors use normative individualism to introduce the concept of comparative institutional analysis. Comparative institutional analysis examines which institutional arrangement--markets, governments, or civil society--fails the least in securing the diverse aims of all individuals.

Using those theoretical building blocks, the authors move to applied theory to examine how individuals interact at the public-private interface. Focusing on that interface...