THE NATIONAL INTEREST AND PUBLIC CHOICE
by R W M Johnson
(Abbreviated version of presidential address to the 38th Annual Conference of the Australian Agricultural Economics Society, Wellington, 8 February, 1994. The author acknowledges useful discussions with Ray Trewin, Roger Rose, Russell Reynolds, Onko Kingma, Roger Mauldon, Ray Jeffery, Allen Petrey, Stuart Morriss, Frank Scrimgeour and Caroline Peren. Nevertheless, the usual caveats apply.)
There has been increasing scrutiny of government policy decisions and advice in recent years. The supremacy of the national interest has been questioned and self interest theories explored. Administrative systems have been reformed, and the role of the Westminster model of government challenged. Increased interest by economists in the policy process has created a new subject area in economics, namely, public choice theory. It places greater emphasis on individual choice and hence on the way political institutions meet society's needs. It provides a suitable framework for explaining political decision making and administrative processes. In this paper, New Zealand agricultural policies in the last two decades are explored from this viewpoint and the applicability of the theory assessed.
INTRODUCTION
The aim in this paper is to analyse changes in New Zealand agricultural policy over the last twenty years from the standpoint of public choice and draw suitable conclusions. The political and economic framework in which these policies were formulated and how this has changed over the period are discussed. Reference is made to the main theoretical explanations of these changes so as to offer some testable hypotheses for discussion.
THEORIES AND FRAMEWORKS
Public choice theory encapsulates the ideas that political decision-making has regard to the interest groups in society who request favours of one sort or another, that public bureaucracy can have its own plans and goals, that interest groups can capture the bureaucracy in some circumstances, and that the bureaucracy can be too big and unwieldy. It also distinguishes between the determinants of policy that arise from private interests and those of the public or national interest. Finally, it provides a framework for understanding the limits of political choices through discussion of the conventions and rules of constitutions.
To explore these theories, the approach taken is to first identify what is meant by the
'national interest'; and then to review the theories that suggest alternative hypotheses
of policy formation and decision making20. Martin's
(1989) approach of analysing private interest models is followed. This approach focuses
particularly on the role of interest groups and the resolution of their collective needs.
Particular attention is paid to the definition of an 'efficient' political market and its
consequences for policy makers, and different variations of the public choice model. The
discussion then turns to particular agricultural policies of recent years and the groups
that these policies served.
20 The focus is on the party system within the Westminster model as appropriate to Australia and New Zealand. Quiggin (1987, p.12) points out that political parties play a relatively small part in public choice theory.
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