THIS week's Free exchange column is a remembrance of Nobel Prize winning economist James Buchanan, who died on January 9th. Mr Buchanan was one of the critical thinkers behind public choice economics: the application of economic analysis to matters of political decision-making.

His interest in the workings of the state reflected its growing importance. From having only a minimal role in pre-industrial days, Leviathan came to control swathes of economic activity as the 20th century progressed. National-security demands were partly responsible. Government responses to market failures, from unscrupulous business practices to the trauma of the Depression, also played their part. As demands on the state grew, so too did the need to understand its behaviour. Mr Buchanan was one of a small group of economists wondering whether the state was up to the task. Untrammelled markets may fail—by producing more pollution than society as a whole would prefer, for example. That creates the potential for welfare-improving government intervention, such as a tax on pollution. Yet there is no guarantee a state will get it right. Whether interventions are justified, Buchanan pointed out, depends on whether government officials are motivated by self-interest as well as a sense of public duty. Weighing up the pros and cons of policy choices requires an unsentimental view of government actions, a position he called “politics without romance”. In exploring this he helped create public-choice theory.

Non-economists seem to scratch their head a bit when it comes to Buchanan's work; haven't people always been cynical about politicians? The answer, of course, is yes; one has only to look at 19th-century political cartoons to know that Buchanan didn't invent the idea of political cynicism. Yet his work is important for several reasons.

One is that it was a useful corrective at a time when cynicism about government was at a low level, in general and in economic policymaking. In the early postwar period there were strong inclinations toward technocratic tinkering within economics, at the micro and macro level. Much of this activity had its roots in quite good analyses of market failures. It was important, however, to understand the ways that government could fail systematically. That is a second reason to appreciate Buchanan: that his work provided a structure around which systematic economic analyses of government choices and failures could be conducted. Rent-seeking is a very useful concept to have around when thinking about policy.

But I think there is a particular relevance to Buchanan's work now given the extraordinary level of political frustration across the rich world. On the one hand, it seems to me that a deep attitudinal cycnicism about politics has not translated into a corresponding re-assessment of policy design. To oversimplify: everyone agrees that Washington is a mess, but no one wants to publish a white paper on how a particular policy is the optimal because it will be more robust to political wheeling and dealing than alternatives. Well, almost no one. My favourity counter-example is Robert Stavins' stumping for a cap-and-trade system, based on the notion that when lousy politicians inevitably provide giveaways to industry by handing out rather than auctioning off permits that doesn't reduce the emission-limiting power of the law. Carbon tax exemptions would, by contrast. I find that to be a rare and refreshing approach. Most pundits are more likely to say, "here's an ideal tax-reform approach" than "here's a third-best approach that is actually optimal taking as given unsavoury legislator deal-making".



And on the other hand, we all still like our politics personal, despite lots of good evidence that changing the names on the doors doesn't have a huge effect on outcomes. Public choice suggests that politicians are influenced by the incentives around them and aren't simply members of a priestly class dedicated to advancement of the public interest. That, of course, means that swapping one set of politicians for another without changing the institutional incentives will have a minimal effect on governing behaviour. Not no effect, of course; different parties are in hock to different interest groups. But the op-ed pages of America overflow with demands that politician x behave better or party y pay less attention to interest group z. Ultimately, if you're unhappy with the outcomes of political business as usual you need to reflect on and argue for reform of the underlying institutional, or constitutional, arrangement. That is a lesson from Buchanan.

A lot of Buchanan's work seems, superficially anyway, to be too obvious to count as insight. And yet, quite a lot of the political world seems not to have learned much of it.