This book provides a theory capable of explaining the patterns of public expenditures and taxation that occur under representative government. Economists and political scientists have come to realize that issues of public policy and public finance cannot be solved on the naive assumption that these are problems tackled by a government that exists only to serve the public good. Instead, government must be understood as one of the major economic institutions of society, one that behaves like more familiar economic institutions--the household and the firm--though the market it confronts is a market for policies rather than for goods and services. Albert Breton's pathbreaking work remains important in taking us toward a theory of representative government that enables an understanding of the observed behavior of political institutions. The author's analysis is cast in a relatively simple demand, supply and demand-supply-equilibrium framework, using the tools of marginal and stability analysis to explain the forces that influence and determine the flow of resources as they are allocated between competing ends in the public sector. The book presents a model of demand by citizens, who are assumed to be maximizing their desires for specific public policies and private goods, and a model of the supply of public policies by politicians and bureaucrats, who are assumed to be maximizing the probability of their re-election and the size of their budgets. Breton defines government policies and the institutional framework for collective choices in terms that render them amenable to further analysis. The main accomplishment of Breton's theory is that it provides the ability to analyze the interaction of individuals and generates testable propositions about the behavior of these individuals as well as about the behavior of public expenditures and taxation in more aggregative terms. In this way the book will be useful to students of economics, economists, and those interested in economic theory.

This is the first book to develop a formal theory of supply by bureaus. Niskanen develops an original and comprehensive theory of the behavior of bureaus with the institutions of representative government. He challenges the traditional view that monopoly bureaus are the best way to organize the public sector, and he suggests ways to use competitive bureaus and private firms to perform operations such as delivering mail, fighting wars, or running schools more efficiently than the present government agencies.The theory concludes that most bureaus are too large, grow too fast, use too much capital, and exploit their sponsor. His theory explains the relation of the output and budget of a bureau to demand and cost decisions. It compares bureaus with other forms of organization facing like conditions and delineates the production and investment behavior of a bureau, the behavior of nonprofit firms with no sponsor, the behavior of mixed bureaus with financing from a sponsor and from the sale of services, the effects of competition between a bureau and a competitive industry.The book also develops a simple theory of the market for public services financed through a representative government; the final section suggests a set of changes to improve the performance of our bureaucratic and political institutions, based both on theory and Niskanen's professional experience. It is essential reading for professionals and students in the social sciences and could prove instrumental in reforming some of our government institutions.

Can traditional economic theory help to solve today's vexing social problems? This unique collection of thirty-six papers strongly suggests that it can. The economic approach is applied imaginatively by the authors to a wide range of contemporary issues, such as crime, higher education, the environment, revenue sharing, equity, justice, and the distribution of income. The articles also deal with governmental behavior and the role of the economist as governmental adviser. Shaped during the preparation and teaching of college classes, the book is well suited for courses in principles of economics, microeconomics, price theory, and public policy development and analysis. It should also prove a useful reference work for policy makers.