Connecting Arrow's Possibility Theorem with Public Choice Theory: What Price For Collective Rationality?

by Carl J. Dahlman


Purchase Print Copy

 FormatList Price
Add to Cart Paperback61 pages Free

The Arrow Possibility Theorem is an axiomatic description of basic ideals for a democracy. There is a often logical contraction between these ideals, which can lead to never-ending decision cycles--unless a dictator resolves the conflict. The branch of economics called Public Choice studies various observed practices in collective decision making process. It assumes that public servants will strive to attain their own private goals, creating processes which violate our fundamental notions of fair democratic processes. The author proposes that the sometimes unsavory decision processes studied in the public choice literature all break at least one of the axiomatic conditions specified in the Arrow Possibility Theorem. This implies that public choice processes actually contribute to stability in democratic decisions without having to rely on a dictator. Thus, in order to attain virtue (our democratic ideals), we must carefully choose our vices (the nondemocratic processes that must violate our ideals).

Originally published in: Makten over politiken, 1999, pp. 1-61.

This report is part of the RAND Corporation Reprint series. The Reprint was a product of the RAND Corporation from 1992 to 2011 that represented previously published journal articles, book chapters, and reports with the permission of the publisher. RAND reprints were formally reviewed in accordance with the publisher's editorial policy and compliant with RAND's rigorous quality assurance standards for quality and objectivity. For select current RAND journal articles, see External Publications.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.