ABSTRACT
This chapter shows how different methods that are broadly viewed as economic reasoning can be used in the analysis of diverse institutional arrangements. The identifying characteristic of the public choice approach has been the application of economic reasoning to nonmarket decision making. The approach has provoked considerable controversy in the social sciences, especially among students of public administration. When arrangements for making choices are themselves conceived as being the subject of choice, we recognize a realm of choice that might be called institutional choice. Most of the work in public choice can be viewed as using one form or another of rational-choice models. Rational-choice approaches presume varying degrees of concern for others; knowledge about the world; consistency in valuation; and internal mechanisms for making choices. What has been called the span-of-control principle in the public administration literature reflects an important consideration in bureaucratic patterns of organization.
