Public Choice Theory and Public Choices

Abstract

Reorganizers of the state in Australia, New Zealand, Denmark, and Sweden during the 1980s tried to separate policy-making from the production of welfare and other services by introducing market disciplines and competition. Fiscal bureaucrats, afraid of rising fiscal deficits and public debt, sought to control what they saw as rent-seeking behavior and agent abuse of principals in the public sector They argued these changes would reduce incentives for collective rent-seeking behavior and prevent shirking. Fiscal bureaucrats thus sought to control future behavior in the public sector by changing the incentive structures workers and agency managers faced.