Homo Economicus and the Theory of Public Choice: J. Buchanan vs. E. Ostrom

This study aims to compare and analyze the public choice theory of J. Buchanan and E. Ostrom. Buchanan and Ostrom are in the same position in that they are based on the neoclassical economics‘ concept of man. However, differences are found in the concrete conceptualization of economic man. Unlike Buchanan's consistent adherence to the concept of the economic man as a utility-maximizer, Ostrom accepts the concept of the economic man, but in addition to it, he acts rationally in the long-term view through people's ability to learn and the process of trial and error. The ability to do is treated as a key variable. Although the two researchers explain the dilemma of collective action of economic human beings, it is also a big difference that they each hold the constitutional system reform theory and the self-governing institution as a solution to overcome it. The differences in their institutional solutions for overcoming the collective action dilemma seem to originate fundamentally from differences in research approach methodology. Buchanan develops the argument with the explanatory frame of a social contract between utility-maximizing seekers. Through an empirical case analysis of successful shared resource management cases, Ostrom present design principles of self-governing institution to overcome the collective action dilemma through an inductive approach. This paper aims to clarify how fundamental differences in research approaches lead to two different types of institutional solutions.