|Public choice theory points out reasons why government might be inefficient in providing public goods and services. This is a theory developed from the study of taxation and public spending. It studies the decision-making behavior of voters, politicians and government officials from the viewpoint of economic theory. It can be considered as a bridge between economics and political science.|
- Citizens use political influence to get special benefits called “rents” from government policies (e.g., import licenses or rationed foreign exchange) that limit right of entry to important resources.
- Politicians use government resources to strengthen and maintain positions of power and authority.
- Bureaucrats and public officials use their positions to obtain bribes from rent-seeking citizens and to carry out protected businesses on the side.
- States use their power to seize/capture private property from individuals. The net result is not only a misallocation of resources but also a general reduction in individual freedoms.