Transformations

When I query Grok about the core intuitions of Public Choice, I ask about transformations. The individual who is hired to look after the public good, let’s self-interested motives seep in. Groups of people band together once they realize they share an interest and form a selfish group most likely at odds with the greater group. Grok confirms:

Yes, exactly—that’s the beating heart of The Calculus of Consent (1962) by James M. Buchanan and Gordon Tullock.208

They took the standard economic assumption—that people are rational, self-interested utility maximizers—and applied it unflinchingly to politics. No romantic view of benevolent “public servants” here. Government operatives (politicians, bureaucrats, elected officials) perform their own personal calculus before every action: “What’s in it for me—reelection odds, bigger budget, more power, prestige?” They weigh expected personal benefits against costs, just like a firm maximizes profit or a consumer maximizes satisfaction.22

And yes, groups form that do precisely the same thing. Individuals with aligned interests rationally band together into coalitions, interest groups, or “pressure groups” (there’s even a whole chapter on them). Why? Because collective action lets them concentrate benefits on themselves while spreading the costs across the broader public (classic concentrated benefits/dispersed costs dynamic). The main mechanism they analyze is logrolling (vote-trading): one group supports another’s pet project in exchange for reciprocal support, creating temporary winning coalitions that get policies passed even if the overall result is inefficient.2023

The Two-Stage Framework They Build

Buchanan and Tullock split decision-making into two levels to make sense of this:

1. Constitutional stage (the “rules of the game”): Here, people choose the decision rules in advance (ideally by near-unanimity, under a veil of uncertainty about future positions). The goal is to minimize the sum of external costs (being harmed by decisions you oppose) and decision-making costs (the hassle of reaching agreement).
2. Post-constitutional / operational stage (playing the game): Once rules like simple majority voting are set, self-interested operatives and groups go to work. Majority rule becomes a license for coalitions to impose external costs on minorities—exactly why you see pork-barrel spending, special-interest legislation, and “majority tyranny” in practice.23

They even graph the trade-off: unanimity is ideal for zero external costs but insanely high decision costs; simple majority is cheap and fast but creates huge external costs. Optimal rules sit somewhere in between, and the book argues for constitutional restraints (supermajorities, generality principles, federalism) to channel this self-interest productively rather than let it run wild.

This is the birth of modern public choice theory: politics isn’t a noble quest for the “public interest”; the public interest is simply the aggregate of all these private calculations. It explains why government grows, why lobbies thrive, and why “good government” reformers keep failing without changing the rules of the game.

Tullock later extended this with rent-seeking (wasting resources to capture transfers), but the foundation is all right here.

Me again. In this follow-up presentation, presented 25 years after the publication of their theory, Tullock laments the lack of follow-up on rule making and following that arrives as a primary condition to their proposal of public choice.

But I think there is another direction to take their powerful insight.

Although the formal constitutional rules that Buchanan and Tullock placed at the heart of their analysis are often codified in founding documents and statutes, the informal “rules of the game” that emerge afterward are equally—if not more—consequential. These unwritten norms continuously morph and adapt. Individuals first secure their own private interests, then weigh the external or public consequences of their actions, and finally align with others to form coalitions. Once formed, each coalition begins to behave as a new, unitary self-interested actor within the political arena. This layered sequence of micro-calculations and group realignments produces perpetual transformations in the effective institutional order. It is precisely these ongoing shifts that generate the momentum and structure the market-like dynamics of governance itself.

There’s more here about the underlying variables that track this activity.