James M. Buchanan

James M. Buchanan was an American economist who helped found public choice theory, applying economic analysis to political decision-making. He received the 1986 Nobel Memorial Prize in Economic Sciences.

Public choice: The economic analysis of political behavior, institutions, and collective decision-making. Buchanan helped establish this approach by applying economic reasoning to voters, politicians, and bureaucrats.
Calculus of Consent: A 1962 book by James M. Buchanan and Gordon Tullock on collective choice and constitutional rules. It develops their account of how individuals might agree on rules for making political decisions.
Gordon Tullock: An American economist and political scientist who helped found public choice theory. Tullock coauthored The Calculus of Consent and became Buchanan’s closest intellectual collaborator.
Nobel Memorial Prize in Economic Sciences: An annual international award recognizing contributions to economic science. Buchanan received the 1986 prize for developing the contractual and constitutional bases of economic and political decision-making.
Constitutional economics: The study of how constitutional rules shape political and economic choices. Buchanan made the choice of political rules, not only choices within them, a central economic question.
Fiscal illusion: A gap between citizens’ perceived and actual costs of government taxation and spending. Buchanan analyzed how obscured tax costs can weaken resistance to expanding public expenditure.
Frank H. Knight: An American economist known for distinguishing measurable risk from uncertainty. Knight’s seminars at the University of Chicago influenced Buchanan’s early economic thought.
Virginia political economy: A school of political economy centered on institutions, individual choice, and constitutional rules. Buchanan helped establish this research tradition at the University of Virginia and later institutions.
Social choice theory: The mathematical study of how individual preferences can be combined into collective decisions. Its aggregation problems helped motivate Buchanan’s skepticism about treating society as having a single will.
Logrolling: The exchange of political support among legislators to secure votes for separate measures. Buchanan and Tullock examined vote trading as a strategic feature of collective choice.

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Vernon L. SmithRelated: Buchanan’s influence on Smith’s thinking connected experimental economics with constitutional political economy.