Economic Analysis of Politics: Contributions and Limits of Public Choice Theory

Abstract

Public Choice Theory (PCT) has profoundly reshaped the positive analysis of politics by applying microeconomic reasoning to political institutions, incentives, and collective decision-making. This article offers a comprehensive and integrative review of the theoretical foundations, empirical applications, and conceptual limitations of PCT, with particular emphasis on the transition from the notion of a benevolent state to a view of politics as a system of exchange constrained by institutional rules (Buchanan & Tullock, 1962; Mueller, 2003).
Using a narrative review with systematic elements, the study synthesizes classical contributions -such as the median voter theorem, political budget cycles, regulatory capture, and the logic of collective action- with contemporary extensions addressing constitutional design, populism, global public goods, and behavioural critiques (Sen, 1999; Kahneman, 2011). The literature is organised into four analytical axes: foundational models, institutional mechanisms, theoretical extensions, and empirical applications.