Public Choice : An Overview and Some Implications for the Korean Economy

Public choice is an interdisciplinary area that uses economic methods to study political decision-making. Public choice seeks to understand the way those political processes actually work to allocate resources and design public policies by using the same tools that had been applied to market processes. The motivating idea behind public choice was to use economic analysis to describe the political process as it actually works, not as people might hope it ideally should work. This overview is divided into three broad areas. First, public choice develops a framework for analyzing how democratic political institutions aggregate the individual preferences of group members into an aggregate group preference. Second, public choice depicts the public policy process as a political marketplace and describes how negotiations and exchanges within that political marketplace produce public policy. Third, public choice analyzes how the rules and institutions within which political decision-making takes place are made. A substantial amount of public choice literature suggests that the close relationship between government and business interests in the Korean economy will be counterproductive to continued economic growth.