Social and Behavioral Sciences Commons^™

Pareto Optimality And The Rule Of Law, Noel B. Reynolds

Faculty Publications

In 1959, James M. Buchanan criticized the collectivist misuse of Pareto optimality by the "new welfare economists" and made a first attempt to extend that individualist concept into the political realm. Over the following three decades he further developed his political application of Pareto’s insight to buttress an essentially economic analysis of political exchange that would justify the processes of constitutional democracy in the same way Pareto efficiency justifies free markets. In this paper I will explain why Buchanan’s particular formulations will not work and propose a more comprehensive solution that accomplishes Buchanan’s announced purpose. I will argue that a …