Public Choice, Economics of Institutions and the Italian School of Public Finance
A vast, multi-disciplinary, literature has investigated the reasons why, in democracies, policies may actually pursue vested narrow goals, to the benefit of restricted groups but at the expense of the community. This analysis constitutes the foundation of
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Abstract A vast, multi-disciplinary, literature has investigated the reasons why, in democracies, policies may actually pursue vested narrow goals, to the benefit of restricted groups but at the expense of the community. This analysis constitutes the foundation of influential contributions in the growing field of economics of institutions. This study highlights how the concepts of narrow interest groups and ruling elites can be found in the largely forgotten strand of research conducted by leading scholars of the so-called Italian School of Public Finance (ISPF), which emerged over the end of the nineteenth century and the first half of the twentieth. The chapter also indicates how the fundamental insights on the political decision-making provided by the economics of institutions and the ISPF are able to shed a light on central problems concerning the definition and implementation of cultural policies.
My main thesis—the permeation of public choice theory not only with echoes from past generations of thinkers but with ideas of such thinkers that have maintained their potency (Peacock, Public Choice Analysis in Historical Perspective, 1992: 93)
1 Introduction Governments are not so popular nowadays, as they face a diffuse and increasing criticism. In the US, surveys show that public trust in government decreased almost steadily from 1958 to 2014, going from 73 to 24 %, with a maximum of 77 % in 1964 and a minimum of 18 % in 2011 (Pew Research Center 2014). A similar decline is detected in surveys conducted in OECD countries where the average confidence was 45 % in 2007 and went down to 40 % in 2012, amid the 2008 crisis (OECD 2013). Not surprisingly, in those countries, we also observe a strongly negative correlation between perceived corruption and government confidence. The situation is even worse in Europe, where an already low public trust in government went further down, from 40 % in 2005 to about 32 % in 2013. Confidence in E. Giardina • I. Mazza (*) University of Catania, Catania, Italy e-mail: [email protected]; [email protected] © Springer International Publishing Switzerland 2016 I. Rizzo, R. Towse (eds.), The Artful Economist, DOI 10.1007/978-3-319-40637-4_4
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political parties is further lower in each European country (but Denmark), as it fluctuates around 20 %, in that period. These figures offer a rather disturbing picture of a generalised dissatisfaction about the outcome of policymaking and raise serious doubts about the ability of democracies to pursue collective goals. A fundamental contribution of the economic analysis of political decisionmaking, or public choice theory, has been to highlight how political opportunism, rather than efficiency and equity, may guide public policies. Lack of information is often described as a formidable hurdle for the public in its attempts to oversee and evaluate the political process,1 putting aside the voting paradox (Downs 1957; Riker and Ordeshook 1968), which questions the very fundament of representative democracy, namely vot
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