Research Paper, 2012, 213 Pages
Theoretical links between rational choice theory and public administration
1.1. Theoretical cornerstones regarding the public administration concept
1.2. Reflections on rational choice theory
1.2.1. Concepts’ delineation on rational choice theory
1.2.2. Architecture of rational choice theory – defining elements
220.127.116.11. The concept of rationality
18.104.22.168. Alternatives, preferences, actions
22.214.171.124. Homo Economicus
126.96.36.199. Methodological individualism
1.3. Public Administration-Public Policies-Rational Choice Theory Relationship
1.3.1. Classic researches on rational choice theory
188.8.131.52. [...] in political sciences
184.108.40.206. [...] in administrative sciences
Contemporary perspectives on decision-making – public policy relationship
2.1. Ideas and ideologies on decision and decision-making process
2.1.1. Defining elements of the decision-making and the way to decision
2.1.2. Decision-making from rational choice perspective - efficiency or deception?
2.2. Theoretical considerations regarding the public policies
2.2.1. Concepts’ delineation of public policies
2.2.2. Actors and institutions of public policy-making
2.2.3. Public policy instruments
2.3. Public decision versus public policy
Public policy-making. Evolutions and perspectives
3.1. General considerations on the public policy-making process
3.1.1. Agenda setting
3.1.2. Formulating the public policy
3.1.4. Implementing the public policy
3.1.5. Assessing the public policy
3.2. Public policy-making process from rational choice perspective
3.2.1. Public policy-making in the context of comprehensive rationality
3.2.2. Public policy-making from bounded rationality perspective
3.2.3. Public policy-making from institutionalism perspective
Prints of rational choice theory on European public policy-making
4.1. The principal-agent model, framework for analyzing the European public policy-making
4.2. European public policy-making process from rational choice perspective
4.2.1. Setting the agenda of the European public policies
4.2.2. Formulating the European public policy
4.2.3. EU decision-making
4.2.4. Implementing the European public policy
4.2.5. Evaluating the European public policy
Prints of rational choice theory on national public policy-making
5.1. Qualitative perspective on national public policy-making process
5.1.1. Romanian public policy-making in 1989-2010 period
220.127.116.11. Reform elements regarding the structural dimension
18.104.22.168. Reform elements regarding the procedural dimension
5.1.2. Instruments for rational policy-making process
22.214.171.124. Cost-benefit analysis
126.96.36.199. Impact Assessment
5.2. Quantitative perspective on national public policy-making
5.2.1. Correlations between education and employment policy
188.8.131.52. The relationship between educational and employment policy from strategic documents perspective
184.108.40.206. The relationship between educational and employment policy from statistics evidence
220.127.116.11.1. Outcomes of employment policy
18.104.22.168.2. Outcomes of educational policy
22.214.171.124.3. The regression and correlation for employment policy and education policy
5.3. Brief conclusions
Nowadays, public policies represent the most adequate instrument of action in view to achieve the public interest, no matter we talk about European, national or local level. The rational approach of public policies, representing the topic of the current publication, is or should be a steady feature of public policy making and implementing. We find the origins of this approach both in key papers of political and administrative sciences, as well as in those concerning the theory of rational choice.
In the current book, a direct, causal relationship is established between public administration, public policies and the theory of rational choice. The context of that relationship holds a great structural and functional complexity, demonstrating that the juxtaposition of the three mentioned fields is not enough.
The mechanisms for their connection highlight links of various, non-linear intensities, in view of a finality which should be related every time to the public interest. The public interest is also defined further a process of public choice, more or less a rational one. It is quantified in terms of efficiency and effectiveness, thus supporting the need to introduce the cost-benefit or cost-effectiveness analyses as instruments for assessing the impact of public policies in our research.
The book is structured in five chapters, attempting to analyse, in an integrating vision, a joint, interdisciplinary issue, which is boosted by public policies process on public administration in the context of incorporating the theory of rational choice. The first three chapters have a theoretical character, generally a descriptive one, the fourth and fifth chapters aim to identify the influences or “prints” of the theory of rational choice on public policy making at European and national level.
The publication represents the outcome of researches achieved by authors in the framework of the Doctoral School in Administrative Sciences of the Faculty of Public Administration, National School of Political Studies and Public Administration, Bucharest.
15 February 2012
In the last decades, it has been noted that the public policy area is facing continuous with many threats and opportunities determined by the international context, increasingly affected by globalization as well as by the national context which needs to meet the requirements for ensuring the quality of life. The new global challenges, the economic and political changes have imposed the creation of a stable framework for developing, implementing and evaluating the public policies at national level. The public policy-making process from Romania has known a whole series of reforms, as an answer to these changes. The rational choice theory attempts to provide through its assumptions and tools a support for public policy-making to the governments. In response to these changes public policy process in Romania has seen a whole series of reforms.
A long line of outstanding researches defined and redefined the rational choice theory, pointing out its wide application to the study of government and to the ways in which the government carry out the public policies. During its development, the rational choice theory has been poured with both, praise and blame. Buchanan and Tollison emphasized in 1972 that the rational choice is a “new entrant” on the academic landscape.
The rational choice, as any successful intellectual innovation, has created a new generation of researchers, publications, journals and research centres, given a diversity of approaches and methods. The research produced over the 60 years of its existence is substantial; nowadays around 10 journals are solely focusing on rational choice research field, and more than one hundred of journals have published articles about the rational choice. Also, Econ Lit and Springer databases list approximately 10,000 articles and books that address the subject on rational choice.
It is worth to note that rational choice theory was not a phenomenon restricted only to USA, other centres of research on rational choice flourished during the 17th century, the 18th and the 19th centuries and, new public choice societies were created in Japan and Europe. In Europe, the initial inspiration for rational choice occurred through the works of K. J. Arrow in
“Social Choice and Individual Values” (1951); A. Downs in “An Economic Theory of Democracy” (1957); D. Black in “The Theory of Committees and elections” (1958); J. M. Buchanan and G. Tullock in “The Calculus of Consent” (1962) and M. Olson in “The Logic of Collective Action” (1865). These papers are regarded as the “classics” contributions of the rational choice literature, being considered the foundations of rational choice movement and the rational choice “Pentateuch” in some papers.
The research topic of rational choice theory has been diversified over time; in its angle of analysis founding issues such as: the war, the bureaucracy, the voter’s behaviour, the behaviour of interest groups, the public expenditures, the monetary policy, the policy-making process and other issues of social sciences in general. Applying rational choice theory to the study of public policy and to the management of political process represents a significant challenge for studying governance. The premises of these theories have subtended the emergence of a new model of public policy analysis focusing on the formulation and implementation stage; the approaches being driven by the idea that government institutions give three features to the public policies: (1) legitimacy [public policies involve legal constraints for citizens]; (2) universality [governmental public policies can have as target group the whole society]; (3) coercive force [the mandatory compliance by coercion].
The rational choice theory helps us to understand better how economic, social and political background is changing and how the public policies must evolve for adapting themselves to the changing needs and to the change of society. The origin of policy science is found in a Laswell’s essay, “The Policy Orientation”. The author defines public policies as the most important elections and outlines the main defining features of policy science:
- it is multidisciplinary, uses methods and knowledge from different fields namely, public administration, law, political science, economics, organization theory, etc.;
- it is focused on solving problems, the public policy science has not only an academic character, but it is oriented on real problems, seeking solutions to these;
- it is explicitly normative, to wit assuming that it cannot be absolutely objective in the study of government action.
The development of the public policies filed in Romania, occurred as an answer to both, the changes on the international and European level and, on domestic level also. After 1989, after the denunciation of communist regime, it start opening the political system towards liberalization and public participation, and as a result of this it occurred the intensification of the demand for public policy.
The “consolidated” beginning of the reform process is marked by the adoption of the Strategy for accelerating public administration reform that proposes an approach of the reform process based on three strands: (1) decentralization and deconcentration of public administration, (2) civil service reform and (3) improving the public policy-making. The all changes occurred in the whole society and in particular, within public administration outline the requirements for justifying the ways in which the public administrations’ intervention should be adapted to market pressures. Applying some rational public policies is one of the express objectives of the strategy. In this sense it is fostered, detailed and promoted the disciplined and organized approach of the society problems. From this perspective (rigorous approach), the problems analysis require the knowledge of certain methods of the scientific approach of the community and state action, methods relate to the rational choice theory.
Therefore, the idea that public administration represents the formal framework in which the public policies decisions are formulated, initiated and implemented in such a way that the objectives of political power to be turned into results, has been strengthened through national efforts supported by the specialized structures of the EU. The recent steps of Romania for understanding the new way to manage the public policies have determined to set out the institutional framework for developing, implementing and evaluating of public policies and to the improvement of the legal and procedural framework of the field.
The impetus for promoting the public policies, but also, the main reason that they are the core of the government activities is found in the tension between the free market and public sector. The state involvement in the market economy is usually done through executive bodies with approve in principal, of the legislative bodies. This constraint is only a necessary condition for increasing the role of the government institutions in the public policy-making process.
The complexity of the topic “the rational perspective on public policy-making process” and the intrigue drawing by the diversity of views concerning the contributions and limits of rational choice theory have bestirred the interest to carry out this research work. Emerged on question such as: “Are the answers of public intervention rational?”, Could we rather identify within public policy-making process elements of rational choice theory or of incrementalism?”, the research has got to be drawn and developed on the quest “To what extent could we relate to public policy-making process as an approach shaped by the assumptions of rational choice theory?”.
Behind the questions are found the following hypotheses:
A1: “The lack of coherence in public policy-making”;
A2: “The emergence of changes in public policy-making process has been determined and the new status of Romania, namely the European Union Member State”;
A3: “The public policy-making process follows rather the preferences of the political actors than solving a problem of public interest”;
A4: “The rational choice perspective on public policies allows the elaboration of certain coherent and efficient public policies”.
In drawing a relevant answer, the general objective of this paper is to analyze the role and the place of rational choice theory within the public administration more precise, within the public policy-making process. According to the general objective of this paper have been outlined the following specific objectives:
- identifying and analyzing the main aspects of rational choice theory;
- setting some theoretical connections between public administration’s study and rational choice theory;
- exploring, in a multidisciplinary way the public policy-making process in general, stressing the rational choice perspective on this;
- emphasizing the theoretical and practical facets arising from the acceptation of rational choice theory assumptions on the European and national policy-making process.
In the context that I presented above, I mention that the research was based on a continuous review of the specialised literature, on scientific exploration of some theories and testing these theories and hypotheses. The study case, in the way defined by Yin has been used as research strategy. In order to answer to the research questions, the study was designed and built dyadic, the first part with the European policy-making process, as unit of analysis, and the second part enclosing to the national policy-making process approach. In the first part of the study, the authors chose to use a more qualitative analysis, because she sought to analyze the extent to which the legal and the institutional framework allow the development of rational public policy.
For solving the last issue, a subsequent research hypothesis has been formulated, namely, “the rational elaboration of public policies involves a correlation between the results of the public policies from complementary areas”, and the study has been defined to investigate the relationship between educational and labour employment policy. To test this relationship have been collected data from the National Institute of Statistics, the Ministry of Education, Research, Youth and Sports and interpreted using the correlation and regression methods (quantitative research). The starting point for this study was to analyze the existing laws in the field and all statistical yearbooks during 1989-2010 to determine the evolution of the results of the two policies under investigation.
Both methods allow the measurement of this relationship in two different ways, but they have also and common points. The correlation is used in order to find a number that expresses the relationship between variables and the power of this relationship without making a distinction between dependent and independent variable. The causality is not taking into account. On the other hand the regression is used in order to measure the relationship between two variables for estimating the values of the random variable on the values of the fixed variable. The regression aims to establish the causality relation between variables.
The results of both models has been got using the mathematical formulas especially developed for them and with the support of the programme for statistical analysis, namely Statistical Package for Social Science (SPSS).
Like all research work and this work is likely changes, it can be improved through further research, that can continue the research on the policy-making process in terms of the perspective developed in this paper (rational choice theory) or can complete the results, addressing from different angles the issues related to this research. A first limitation for our study has been represented by a large number of works both pro and against the rational approach of public policy.
Other difficulties of this research focused on the information got in the documents analyzed during the empirical research, because they did not always correspond with the needs of the current survey, with the needs regarding the quality and quantity of information. Also, the lack of statistical data for certain periods, or the discrepancy between the data found in various sources on the same phenomenon or even within the same sources have been limits of this research.
Based on literature review and empirical research have emerged some study directions that supported the answers to the research questions drawn and allowed to structure this paper in five chapters detailed in the following sections.
The previous schools of thought, but also the contemporary ones are concerned on the study of framework within the success or the failure of government is materialized. Given the interdisciplinary feature of public administration study the diversity of concepts and notions offered over time to explain and understand its significance, as well as the concept itself and the factors of its development, become essential to clarify the meaning of some concepts.
It is widely recognized that the scientific knowledge of a subject requires the identification of the concepts. The notion of public administration has been widely and different analysed; the modern administrations being the result of the complex process of historical evolution of the states. The foundations of modern public administration have been built with hundreds of years ago, over different nations and cultures. The Bible mentions a variety of managerial and hierarchical structures that serve as a prototype for public governance. In Antiquity, the Greeks and the Romans developed methods for distribution of work in order to control the conquered lands and peoples. Ottoman and Persian Empire paved the way of public administration to the modern era.
In Romania, a first source of inspiration, information and documentation for public administration was the Institute of Administrative Sciences “Paul Negulescu”, founded in 1925 at the initiative of Professor P. Negulescu, founding member of the International Institute of Administrative Law. In 1948 the communist regime eliminated abusive the institution, but it was reinstated in 1995 in Sibiu. The institute became a forum for scientific debate for scholars, practitioners and teachers on complex issues of public administration. A few years later, in 1998, the Romanian Institute for Public Administration was established at the initiative of professor Ioan Alexandru. In 2001, following the preparation for accession to the European Union was established the National Institute for Public Administration, that
working as an organizational structure within the National Agency of Civil Servants, since November 2009. Another source of research is represented by public administration faculties, NGOs, associations and foundations whose purpose is to study and support the public administration in various forms.
Delineation the content and the domain of public administration has both, a theoretical and a practical importance. David H. Rosenbloom, in his paper, “Public Administration” emphasizes that “public administration, like many other human endeavours is difficult to define, but people have all a sense of it, although are different opinions about how it could be done”.
The Romanian interwar doctrine outlined the main perspectives on the “public administration” concept. In the following lines, for emphasising the valuable definitions formulated in this period, I shall give a brief overview on the opinions from that time. In Paul Negulescu words “administrations includes the state activities regulated by law” and consists on “all public service activities designed to satisfy the general interest”, public administration being “the body that through the continuing law enforcement provides all the society needs”. Another emblematic figure for public administration study from the interwar period is prof. Anibal Teodorescu, who considers the public administration as “the action of executive branch through public power processes”.
The post war conceptions about public administration move away from the traditional notion, public administration meaning taken the form of “that activity which consists mainly in organizing and ensuring the execution, but also in direct execution of the purviews of the Constitution, of the all legal acts and of the other legal acts carry out by the authorities of the rule of law”. In the light of this interpretation we find two essential and indispensable components of public administration, namely the structural-organic element and the functional element. Taking into account the complexity of the concept, professor I. Alexandru asserts that public administration represent the “using of management, political and legal theories and processes to achieve the legislative, executive and judiciary government mandates, in order to ensure the regulations and the services for the society as a whole and for its segments”. For a comprehensive example, as well as for covering the meanings of the “public administration” concept, we find necessary to continue the research approach outlining a modest number of definitions, formulated by the specialised literature beside the special formulations of professor Ioan Alexandru and Antonie Iorgovan outlined above.
Given the goal of public administration, which by its authorities carry out legal acts and technical operations in order to organize the execution and to enforcement the law and also the fact that public administration organise or provides direct public services, prof. Corneliu Manda, defines public administration as “all local and central authorities of public administration and its structures that in respect of public power enforcement the laws and perform public services within the law”.
According to another opinion public administration represents “the activity for organizing and enforcement the law, with character of disposition or provider, which is achieved mainly by public authorities and their civil servants and, in the alternative by other public authorities, and by particular organizational structures involved in activities to satisfy the public interest”. Also, according to professor Ioan Santai’s assertion public administration may be considered “that category of state authorities constituted under the same core function (forms) of activity, that is carry out and by which is achieved in specifically way the public power”.
We note that the explanation and definition of “public administration” has been done in relation to other concepts, such as public service, public power, administrative body, civil service, public authority, administrative authority, public interest. The using of some concepts such as “public service - providing activity”, “public power - prescriptive activity”, “public interest” by Romanian literature emphasises the links between domestic and French administrative system.
The theoretical toolkit available through bibliographic sources underlines and stresses the interdisciplinary nature of the administrative phenomenon research, facilitating the different perspectives of analysis of the public administration, namely legal, managerial, political, sociological and systemic perspective. Furthermore, it is estimated that the interdisciplinary is a sine qua non conditions in public administration research, facilitating the exploration of the border areas and allowing the knowledge of what J. Piaget call a “hibernation” of knowledge in the field of administration.
So, according to legal perspective the public administration is a specific institution to other organizations; the main goal of it is a better understanding of the structures and functioning of public administration emphasizing the reflections on texts. Also, the notion of public administration is a fundamental element of management. White in his research asserted that “public administration survey must start from its managerial basis and not from its legal basis. The management perspective as opposed to the legal one assimilates the management methods seeking to discover and implement the most rational and effective methods for organizing.
The political perspective on public administration is supported by Sayre “the public administration ultimately concerned the political theory”, and the Romanian legal literature concludes: “as intermediary between state and civil society the public administration is different by political power (being an instrument of this) and by private life for which ensures through its powers and special regime the order, the enforcement of laws and the operation of public services”.
Since public administration is a social phenomenon it must be understood in its environment and from the sociological perspective. From this perspective, public administration is seen as a vast and complex organization system that is in itself a visible universe, with its laws and procedures, its means of coercion, its customs and symbols, language and its means of communication. Thus, the field open by legal sociology is wide: it includes everything that overlap the political and administrative system (both national and local), analysis of the bureaucratic phenomenon and technocratic power, general way to study the decision-making process that allows to understand the functioning of political-administrative system as a whole. We speak in this context by sociological investigation which is interested in public administration from two different analytical frameworks: (sociology of state such as P. Birnbaum and sociology of organizations, as M. Crozier) or by lawyers investigation who want to investigate detached from legal dogma. The analysis of public administration from sociological perspective has built progressively, starting from the sociology of organizations with its two approaches (systemic and strategic) and reaching to sociology of public administration.
In terms of systemic perspective, public administration is perceived as a social entity, characterized by its own mode of action, a structure and logic. In its complexity the systemic approach of public administration gives the foundation of a consistent and rigorous analysis for an ideal model of public administration, summing up all the desires for any public administration.
Due to the high degree of the variety of the activities covered, the public administration notion is not easily to define, inside of literature the public administration being investigated separately or together from several perspectives, as we have seen. Each of these perspectives offers value items and different institutional approaches, formulating their own methods and definitions for administrative phenomenon in general and for public administration in particular.
During its development, the rational choice theory has been poured with both, praise and blame. Buchanan and Tollison emphasised in 1972 that the rational choice is a “new entrant” on the academic landscape, “rational choice theory remains a threshold of development, but for those who seeking the realism and relevance of their science, to those who seem informed and partially involved, these essays may be suggestive to extend the research purpose in a sub-discipline which will remain open”.
The rational choice theory is a unique approach of social sciences, which locates the human rationality in the hierarchy of the agent preferences. In terms of Buchanan, the public choice perspective is a blending of two elements: (1) homo economicus and (2) public policies paradigm as exchange. The rational choice is defined by Tullock as an application of the economic method to political behaviour and bureaucracy.
For J. Buchanan public choice is defined by reference to three constituent elements:
The query what means the “rationality” is a simple one, but the answer is not so simple. Like many other words used “rationality” can means many things. Therefore, a foray into understanding the nature and significance of the concept requires a brief overview on different approaches and perspectives found in the broad literature. The idea according to that the rationality has a history, a present and a future evolved over time. The “rationality” can be considered the most contested concept of all other concepts of behaviour and social sciences.
A first step to understand the meaning of rationality is the understanding of the meaning of “rational. The various meanings that the term can take are grouped into three categories; “the rationality as the ability of human agents, is in the same time the property of actions and language because they meet certain criteria”. So, a first category takes into account the meanings that refers to knowledge, a second one examines the connotations related to human action, and the third category takes into account the linguistic communication. Drawing a map of the first meanings we identify:
- the rationality consists in compliance with the rules of deductive logic;
- the rationality is the correct mathematical calculations;
- the rationality represent the compliance of the meanings of words;
- rationality means to appeal to amplifiers induction, in other words to test the subject;
- the rationality requires proper assessments of mathematics probabilities;
- to be rational means to make inferences based on factual generalizations.
Regarding the second category, the concept of “rational” is referring to action, to the way in which people behave and not how they make judgments. In this sense to be rational means:
- to act in order to achieve the best goals, objectives or the interests of the agent;
- the rationality means choosing goals, respectively values, so not choosing the means in order to achieve other goals.
The last meaning of rationality does not relate to the action or decision, but concerns the linguistic communication to which in cognitive science can be identified two major contributions. In this respect we refer to Paul Grice’s work which emphasizes the principle of cooperation, which should obey the speakers, in that each person should provide to the his discussant the necessary elements for understanding his assertion and to Sperber and Wilson’s research on the principle of relevance according to any assertion requires an optimal relevance.
The general understanding of the connection between rationality and human nature differ dramatically from one discipline to another; the perspectives on rationality breaching the boundaries of disciplines. Economics, administrative sciences, psychology, biology, anthropology, philosophy, artificial intelligence, all are struggling with discernment, inference and decision-making.
Often, rationality is seen as the progress of the human mind that enables people to develop a language and a society. Researches concern on artificial intelligence trying to understand the rationality by copying and using it in new applications. A common sense given to the concept of rationality is “the abstract attribute of thinkers, thinking, methods and ways of thinking, defined by certain normative standards”. According to a definition of Roger Trigg, rationality is “the ability to argue something that ones consider as true conclusions”. In psychology, rationality is either an ideal type of behaviour with that we have to emulate and create, either a theory of thinking that can be improved or removed using the current knowledge of the brain.
Unfortunately, the notion of rationality is far away from perspicuous, the theorists from various disciplines drawing the attention to the many meanings of this concept. In psychology and science of thinking, the researchers generally try to describe the mechanisms of human thought and the features of the behaviour occurred as a result of thinking. On the contrary, in philosophy and social sciences the applied goals are often normative. There are rational options, and researches try to explain how we (individuals) can find.
In anthropology, “rationality” is either a Western construct designed for impose our knowledge to create knowledge of others, or it is a term broad enough to cover all forms of human learning. In sociology, theorists assert that people are driven by the idea to respect the social norms that govern the recognized behaviour and the reaction to their position in society. This perspective is provided either as an alternative to the rational man or sets an alternative definition to the concept of “rationality”.
The idea of rationality is a central theme of Max Weber’s works and studies, one of the representative voices of the bureaucracy analysis. In his methodological investigations the author emphasizes the universal human capacity to act rationally and the power of social sciences to understand and explain the action. In M. Weber’s studies rationality is a concept “idea-maitresse”, which establishes a connection between its empirical and methodological investigations and political and moral reflections. According to Weber’s view, rationality denotes a computing standard introduced in an action in order to achieve some specific objectives. Depending on their purpose M. Weber distinguishes four types of social action (traditional, instrumental, emotional and rational), each of them having associated a specific form of rationality. Therefore, in line with Weberian perspective it can be distinguished four forms/types of rationality.
[Practical rationality] requires the compliance of the explicit rules of experience and daily practical conduct in order to achieve the final objectives, which can be economic or religious. In other words, this form of rationality can be described as the knowledge of reality through “precise calculation of the appropriate means”.
[Theoretical or conceptual rationality] involves the knowledge of reality based on “theoretical knowledge about the world, which requires a precise knowledge of some abstract concepts”. Its purpose is to promote knowledge of reality based on systematic analysis of the concepts and abstract theoretical principles.
[Formal rationality] is found in those situations in which the action or decision followed a specific and quantitative calculation and a specific procedure. In other words this type of rationality facilitates the knowledge through calculations and numerical terms.
[Substantive rationality] takes into account the knowledge of reality based on standard values by which the actor is limited, such as principle of ethics or justice. Substantive rationality is based on the qualitative content of reasoning that can be limited by ethical, moral or esthetical considerations, while the formal rationality is based on rules of efficiency and practical procedures of cost.
In the literature, the meanings of “rationality” mentioned above are conceptualized as: instrumental rationality and axiological (value) rationality. Each conceptualization has behind a prestigious intellectual tradition. David Hume limits the horizon of rationality, circumscribing it to mathematics and logic. The author distinguishes between rationality and passions and is committed to the idea that only our passions, feelings and emotions are different reasons for our action “cold and distant reason, is not a cause of action, but directs only the received impulse from the desire and inclination, showing us the means to achieve happiness or avoid unhappiness”. Rationality operates in the field of “ideas relationship”, more precise in the field of demonstrations and probabilities and in “areas of fact or existence”, in cause - effect relations. The distinction between reason and passions founded the distinction between the goals and the means used for achieving the first ones. In this sense human action is instrumental rational, regarding how we try to achieve rational the goals given by desires and our tastes. The instrumental perspective is found in Newell’s work “if an agent knows that one of its actions is link with one of its objectives, the agent will choose that action”. Baron characterized the rational thinking as thinking that helps a person to achieve their own objectives.
J. Rawls mentions three principles that instrumental rationality asks:
- the principle of effective means -„ suppose that there is a particular objective that is wanted, and that all the alternatives are means to achieve it. In other words, “given a goal, we have to achieve it with the smallest expenditure of resources (whatever they may be); or, given the means, we have to achieve the objective how well we can”.
- the principle of comprehensive character – as Perry called it –is that one (short-term) plan (or alternative as prof. Miroiu says) is to be preferred to another if its execution would achieve all of the desired aims of the other plan and one or more further aims in addition. In other words, it is preferable an alternative that have the desired consequences more comprehensive.
- the principle of greater probability – suppose that the aims which may be achieved by two plans are roughly the same. Then it may happen that some objectives have a greater chance of being realized by one plan than the other, yet at the same time none of the remaining aims are less likely to be attained.
Analyzing the instrumental rationality, A. Sen identifies two main ways to define it. The first is to define rationality as internal consistency elections, and the second defines rationality as maximizing the self-interest. Two families of models were developed based on these. According to the first dimension, each individual or, in general, every rational actor has certain preferences on a collection of available alternatives; the chosen alternative has the property that is “best” alternative. The second family of models recognize that the members of the group provided a number of alternatives, which they assess in terms of the benefits they can get. The behaviour of the rational actor will take account of the fact that other members of the group have available a number of alternatives that evaluates in terms of their benefits and will also depend on how other group members act.
The instrumental rationality appears as an ideal model when the social problems are very complex and its better described by Alexander:
„in its simple form, the rationality represents a method for choosing the best means for achieving a given objective. This form of rationality is called “instrumental rationality”, and it allows choosing the optimum means for achieving the goals. Often, this kind of issue has a solution based on using a simple or complex algorithm, such as the ones used by engineers”.
The Hume perspective on rationality is often analyzed and interpreted in contrast to the one emphasised by Kant’s studies. Unlike Hume, Kant appreciates that reason can be a cause of action. Kantian epistemology admits the presence of both rational faculties of the agent: subjective and objective, but does not preserve the Cartesian dualism of mind, on the one hand the subject, and on the other hand the object. The author distinguishes between hypothetical and categorical rules; the hypothetical rules are contingent “have to do [...], if [...]”, while categorical rules are not contingent “have to do”.
Kant does not reject the instrumental rationality, but claims that some actions are mandatory not because they have certain consequences for the agent, but because it is the duty of the agent to do it. This “duty” is founded on what the author called the categorical imperative. The categorical imperative has its origin in the pure reason, and the wishes of others individuals are outside to him. The categorical imperative takes one of the following forms:
- „act as though the maxim of your action were to become, through your will, a universal law of nature;
- act in such a way as to treat humanity, whether in your own person or in that of anyone else, always as an end and never merely as a means.
- act in such way that your will to be seen as a universal law through its maxim”.
The categorical imperative can be express also as: „act only so that will could regard itself as giving universal law through its maxim”.
Along to these two intellectual traditions it can be found the studies that try to combine these two perspectives. Ones of the best known are White and Rawls’s studies. Also, the specialised literature distinguishes between the rationality of beliefs and the rationality of action, in other words between normative rationality (theoretical) and pragmatic (practical) rationality. Therefore, feeling the need for more precise terms, the rational choice scholars use the meaning of rationality from economics. This concept is based on the fact that different actions have a certain utility for actor and involves the principle according to that the actor will choose the action that will maximize his utility.
An explanation somewhat classical, relatively narrow and concerned on the logical validity of the goals pursued by human action is given by the economist Vilfredo Pareto. The author considers that human acts may have or not a logical purpose and this logical purpose can be objective or subjective. In author’s terms the behaviours can be (1) logical, (2) illogical or (3) non-logical. Moreover, according to the author’s assertion, the objective rationality of the action refers to choosing the most appropriate means to achieve an end. This type of rationality involves “maximizing” and “optimizing” the results of an action although it is very difficult to say which would be the best way taking into consideration the available means provided by the actor to achieve a goal. The public choice paradigm can be considered a heuristic tool for interpreting the behaviour, and in this sense it is appreciated this has a similar role to that of the principle of maximizing used by other sciences to generate hypotheses in order to explain the empirical phenomena.
Particular for rational choice theory are the concepts of pure (comprehensive) rationality and limited (bounded) rationality. The “perfect rationality” term is invoked for setting hypothesize that people are capable for an unlimited number of deductions based on their beliefs and desires in order to find a rational way of action. J. Elster gives a definition of what should be called “pure rationality” focuses in the content of that on preferences. The author concludes an action must meet three conditions to be rational:
- the action must be the best means for achieving the desires of a person taking into consideration their preferences;
- the preferences themselves must be optimal, taking into account the information available to the person;
- the person should gather an optimal amount of information, neither too many nor too few.
The author’s definition becomes an ideal type definition, this thinking that “for something to be rational, it must get into the area of a conscious, deliberate action”. The actors presumed with comprehensive rationality are analyzed in terms of maximized agents. Also, the comprehensive rationality has been seen as a tool to maximize or optimize the action.
[The concept of limited rationality] as a result of the “strictly” requirements and critics born on comprehensive rationality some authors have tried to change the meaning of the concept of “rationality” in order to approach the rational decision model to the “real world”. The bounded rationality was born as a critique of comprehensive rationality. The author with the wide approach of this is Herbert Simon. He argues “if we admit that man is rational, at the same time we have to recognize that his rationality is limited one”. For explaining this concept, the theorist uses the scissors metaphor, one of blade being “the cognitive limitations” of humans and the other represents “the environment structure”. So, given the elements drawn by Simon for bounded rationality, a simple definition that can be drawn from the literature is its identification with the behaviour that is not entirely understood in terms of complete satisfaction and consistent preferences.
Another alternative for bounded rationality is to define it as “the behaviour that does not meet all the assumptions of comprehensive rationality” and, also as a critique of the comprehensive rationality. Sometimes, in the relevant studies in the matter we find the confusion of bounded rationality with the lack of the ability to account “in the real world, people as opposed to homo economicus are not “calculators” omniscient - they do not perform all the calculations all the time”. Simon attempts to establish the positive aspects of human choice theory based rather on scientific principles of observation and experiment than on postulation and deductive features of the economic theories. The principles of bounded rationality have been formulated for the first time in “Administrative Behaviour” (1947), later showing scientific interest and other theorists.
The principle of intentional rationality - is crucial for the term of limited rationality. This embeds the idea that people are guided by goals, but they often fail in their performance due to the interaction between the cognitive architecture aspects and the fundamental complexity of the environment. Moreover, according to Simon, the principle implies that “rationality does not determine behaviour ... but rather the behaviour is determined by the rational and non-rational elements that limit the area of rationality”.
The principle of adaptation - has its roots in Newell and Simon’s studies and is best formulated in “The Sciences of the Artificial”. This principle argues that actors’ behaviour can be explained by the action or the impact of environmental” on him. Having enough time, people are thinking to the activities they can undertake, so the human rationality is adaptive. From this principle draws the general idea that the more a decider spend more time on analysis of a problem, as with so he will enjoy a better understanding of it and will approximate the current activities and will blur the limitations of human architecture.
The principle of uncertainty – stresses one of the major objectives of rational choice theory in social science, namely the understanding of uncertainty in the light of probability calculations. According to this algorithm we can talk about the expected utility or a distribution of probability, although many empirical studies have shown that humans being have difficulty in using probabilistic calculations, in assessment the risks and establish some connections when a certain phenomenon is surrounded by uncertainty. The scholars of limited rationality considered the uncertainty rather as involving a fundamental choice than a probabilistic calculation. Simon has defined this difficulty “elaboration of the problem”, seeking to denote the fundamental nature of identifying the sphere in which the problem will be solved.
The principle of trade-offs - became significantly by Tetlock and Slovak’s researches which have shown the difficulty of people for choosing between the proposed objectives. Analyzing retrospectively we note the first tool for understanding the trade-offs is the notion of “satisficient” created by Simon, “satisficient implies that people start in order to discover the available alternatives for action, selective researches in the crowd of possibilities and sought to identify the consequences of each alternatives.
The research is often incomplete, inadequate, based on uncertain information, on partial ignorance of ones and is completed in principle with the discovery of a satisfactory means for action and not optimal as required the comprehensive rationality assumptions. Simon coined the term “satisficient” combining two conditions: to be satisfactory and sufficient. A satisficient behaviour is that based on an alternative “good enough” for achieving the goals of the actor. Thus, perhaps the most important distinction between limited and comprehensive rationality is that in the context of comprehensive rationality the actors act to optimize, finding the best solution for the problem, while in the context of limited rationality the actors are satisficient with their actions, adopting a solution that is “almost good/sufficient”. Simon says at one point in his works that “man is rational, but his rationality is limited”.
Perspectives on bounded rationality are also expressed by Goodin, Elster, Jensen and Meckling, who suggested that Simon’s idea on satisficient rationality can be rebuilt appealing to the idea of rational ignorance. They asserted, maximizing does not simply means to choose the best alternative but to choose that alternative which is the best given the constraints, the individual and organizational limitations in which we choose. In this sense, the satisficient, bounded rationality is just a particular case of comprehensive rationality, because to choose an alternative “good enough” means to choose the best alternative given the constraints of the human mind and those of the environment in which human beings act. On the other hand, appealing to simplified models of reality can be also explained as a rational behaviour. If for a choice, taking into account the all aspects of reality is too expensive (the costs are much higher than expected benefits) then it is rational to give up such a strategy: certain “ignorance” defined by our choices based on our simplified models of reality, is rational.
The inventor of limited rationality, in its scientific rationality has distinguished between procedural and substantive rationality (substantive). The term of procedural rationality is based on the psychological process of thinking, particularly on the explanation how people conduct incomplete researches and make exchanges between values. It aims rather the rationality of process, while the material rationality is related to the intelligence of the process outcomes. The father of limited rationality uses the “material” and “procedural” terms to distinguish between the common notions of rational behaviour adopted by economics and psychology. According to this an actor has “material rationality” if he has a set of clear criteria for success and is never satisfied with anything less than achieving the best result with respect to certain criteria. An actor is “procedural rational” if his decisions are a result which of a deliberative process of the issue, and the time and the intensity are different depending on the importance given to the problem of choosing which it is presented.
We emphasize through an intermediate conclusion that bounded rationality does mean neither optimization nor irrationality. Also, irrationality is not a synonym of non-rationality. We define irrational an action or a belief that is not likely to be explained in terms of rational and invariable from observation, while non-rationality circumscribes the concept of behaviour as a result of procedural rationality deviation - it is about the behaviour in the analysis of that it can be observed the rationality but for some reasons it is ignored. For irrationality concept have been made and other interpretations, from that it is worth to mention the following: (1) “the irrationality of action is associated with the illogical action or that is less focused on rational alternatives of action ; (2) “irrational means mindless or less understanding; sometimes it can refers to mental rationality, so the term takes the meaning of the lack of clarity or mental coherence”.
An alternative is a possible state of the world, which would be achieved if we make a particular choice. Rational choice corresponds to the requirement of maximizing the value, means that rational actor will choose the alternative whose results are the best according to the objectives. The choices are explained in terms of beliefs and preferences. A simple definition for “belief” refers to moral action for which an actor is responsible. Rephrasing the conclusions of Robert Dilts’ researches we note “beliefs are judgements or evaluations that we make about ourselves, about others or about the mankind”.
From rational choice perspective, beliefs are a priori data of the rational actor model. In modern times, the benthamite pleasure and pain were transformed into preferences or desires, satisfaction or dissatisfaction. The concept of preference is not unambiguous; this is the reason for that the specialised literature deal with few meanings of this, such as: (1) absolute desire – incomparable for something; (2) the behaviour itself; (3) the deliberative rank-ordering of an agent concerning his results and options.
The preferences can be interpreted as postures that economic actors make about the entities from which they can choose, being also a cognitive concept that we can link to the features of the behaviour. Actor’s preferences will surely determine a person to act according to his beliefs or reasons on the consequences of the possible actions and affect the desire for and against the consequences and perhaps for the action itself. According to another view “the term of preference is used referring to those tendencies, interests, desires that are the impulse of the choices that individual makes in the actions they carry out”.. Preferences express relations between desires, tendencies and our beliefs. During the deliberative process, the rational actor compares and assesses the relative importance of these preferences, establishing a hierarchy, a rank-ordering of those.
From rational choice perspective, the individuals are analyzed as motivated agents by desires and goals expressed in their preferences. They act under specific conditions and the information they have about the conditions under which they will act. Moreover, the representatives of rational choice school emphasized the correlation between actions, preferences and beliefs in a way that includes the idea of consistency of actions with self-interest. It is still impossible for a person to get all the things she wants because it must make choices about the relationship between their goals and the means to achieve them. In other words, the relationship between preferences and constraints can be seen in terms of purely technical relationship between means and ends. Also, the public choice theory says that actors must anticipate and evaluate the different effects of various actions and should calculate which is the best ones for them. Finally, they have to choose the alternative that seems to give the greatest satisfaction. Idea of preferences, especially the one of preferences satisfying is fundamental for the utility theory, according to that the economists explain the rational actions aiming at preferences satisfying. The preferences are represented by utility function and individual choices for action that maximize their utility. The option is rational when it is determined by a rational set of preferences, and the rationality of beliefs, of preferences is established in terms of utility theory. Regarding this concept, the economists have been more precise, Robert Sugden asserts “the neoclassic economics are based on a hypothesis more restrictive of preference’s nature”.
The economic dimension, logic of preferences is completed by a psychological perspective on the meaning of concept. Therefore, from psychological point of view the meaning of preference is the reasoning, judgments of human beings regarding their welfare, their good or the characteristics of a good. According to the hypotheses of rational choice theory each rational actor (homo economicus) has a set of preferences unobservable in general directly, but requires their deduction from the behaviour of the economic agents. Analyzing the specialised literature we can distinguish that these preferences are known as revealed preferences or choosing the behaviour.
From homo economicus hypothesis these preferences are presumed satisfying some general restrictions such as: completeness, transitivity, consistency, unsymmetry, convexity. The maximizing of preference satisfaction is often seen as the key element, the “core” of the economic rationality concept, and some authors assert the rational action involves three operations to maximize (1) collecting a quantity of correct evidence for the a priori beliefs and expressed preferences, (2) forming the best beliefs and preferences given the available information and evidences, (3) finding the best action, given the beliefs and preferences. The below scheme presents the relationship between beliefs, preferences and actions:
illustration not visible in this excerpt
Figure no. 1: The relationships between preferences, beliefs and action
Source: Hansson, S. O., „Preference change: Approaches from Philosophy, Economics and Psychology”
As a rational choice, the action meets the following components: (1) goals and objectives, (2) the options – the palette of the alternatives for action, (3) the consequences - the costs and benefits in relation to the objectives, (4) the choices. We note that “the maximizing action of benefits” is one of the defining elements of homo economicus endowed with perfect rationality (instrumental and intended rationality).
Homo economicus is another element of rational choice theory. Homo economicus is another element of public choice theory. In Romanian language the meaning of “homo economicus” concept consists on the economic man. The concept is also used with reference to economic methodology, emphasizing the maximisation of behaviour. In economics the concept of economic rationality is the expression of the homo economicus model which became a dominant model in social sciences. Using homo economicus, as a general model of motivation of human action becomes a controversial aspect of rational choice approach. According to some authors, the concept of homo economicus as it is understood today was coined by J. S Mill in his “Essays on Some Unsettled Questions of Political Economy” (1848). There are also views according to that the concept belongs to V. Pareto and A. Smith. According to various researchers, homo economicus has different properties. One of them assume that agents are rational without implying they are selfish, others on the contrary assume the agents are selfish, without assuming they aim to maximize the welfare.
For economists the postulate of rational choice behaviour is “man is selfish, rational and wants to maximize the utility”. Homo economicus is the short expression of the rational actor’s behaviour. This idea of homo economicus is based on the following assumptions:
- perfect rationality, instrumental rationality, the actor is endowed with rationality and depending on its goals he can make their own preferences according to the available alternatives. As a rational person, the actor has the ability to compare, to rank-ordering the preferences, and to choose the most convenient alternative;
- self-interest, the individuals seek to achieve the own interest,
- complete (perfect) information, the actor possesses all necessary information: he knows the relevant alternatives and has all important elements of these, he knows the rules that guide the choice of the group and, also he knows that other actors are rational as him and pursuing their own interest through the information that everybody hold.
Gary Becker has a different vision of economic man, he adds the following features: market equilibrium and stable preferences. According to Schmidtz, homo economicus is a mix between the assumption of instrumental rationality and selfish, the result being “the homo economicus model of rational agency. In the field of specialized literature there are other perspectives and interpretations of human economic model. For instance, J. Elster supports the opposition from social science between the two conceptions of man associated with Adam Smith and Emil Durkeim, respectively “the rational instrumental man - homo economicus” and “the man guided by rules - homo sociologicus”. While the first is guided by an instrumental rationality, attracted by forthcoming rewards and adapted to changing circumstances, always looking for improvements, the second one has an behaviour guided by social norms, being pushed back by force of inertia and insensitive to the circumstances, staying loyal to the prescribed behaviour, even if there are new and apparently better options. Also, homo economicus was analyzed in parallel with homo politicus, the latter being the generalization of individuals in their political roles, about that is stated in many works that have lost their rationality. The inconsistency of working with different conceptions of human nature in the economic and political domain is unacceptable, homo economicus being for that matter a standard of human nature.
Another feature of rational choice theory is the methodological individualism. Within the social science literature there is a constant argument about the nature of society and on the best methods for understanding and explaining it. The theories are divided into two broad approaches those which perceive society as a complex of individuals, as aggregate phenomenon and those that consider it as a global order and/or a uniform community. The first attempt to explain social phenomena in terms of “individuals and interactions between them”, while the latter argues that it is impossible for society to be analyzed without reference to the individuals who compose it and/or the collectively which they belong. Over time the opposition between the two doctrines has become a matter of methodology found as “methodological individualism versus methodological collectivism or holism”.
The analysis of specialized literature shows that the strongest defence of individualism is found in public choice theory, the scholars of public choice theory are the individualists of methodological prototype. In terms of rational choice theory, the methodological individualism, principle according to that the social phenomenon is the best explained by reference to individuals and their actions, is a defining element of it. Since 1789, the assertion of J. Bentham: “the community is a fictitious body, composed by individuals” had briefly expressed the liberal individualist point of view.
The contemporary exegesis identify several forms of individualism which start from statements such as: any society consists of people; each of them act more or less according to their desires, with how they understand the situation; the individuals act in institutional contexts, consisting on rules, traditions, habits and ideologies, etc.
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