Institutional Realism: Social and Political Restraints on Rational Actors.

• Author: Tullock, Gordon

Grafstein begins his introduction: "Institutions are puzzling. If they are just human creations, how can they coerce us? If they are not, what else could they possibly be?" The problem has puzzled many people. Nevertheless, we are aware of the existence of institutions and those of us who have had contact with Southern Baptists know that these institutions play a major role in many people's lives.

Most people have deferred further consideration of this problem on the grounds that it's too hard. Grafstein is to be commended for taking it up. From an economic standpoint, the fact that he is strongly critical of the sociological models and turns to rational choice models as his favorite area is encouraging. Unfortunately, he is not very happy about the existing economic rational choice models. Indeed he devotes almost ten pages to criticizing the institutional "model" of The Calculus of Consent. This might make me a biased reviewer, but by coincidence the criticism is mainly of the chapters that Jim Buchanan wrote. The reader may recall that in the Preface to The Calculus of Consent, the responsibility for the chapters is allocated. In practice, I do not disagree with Buchanan on these matters, but both of us have changed our minds to a considerable extent since that book was written.

Grafstein's book is a very careful, well done, discussion of the general problem, but I cannot say that he has actually solved it. He points out that we should accept the reality of institutions and that they do control our lives in many ways. He also points out that they are human constructs and that individuals normally are free to leave...