The Wicksellian Unanimity Rule: The Competing Interpretations of Buchanan and Musgrave

Marianne Johnson

Journal of the History of Economic Thought, 2006, vol. 28, issue 1, 57-79

Abstract: The disparate approaches of James Buchanan and Richard Musgrave to public economics are both anchored in Knut Wicksell's contribution to the theory of public goods. In “A New Principle of Just Taxation,” the second essay of Finanztheoretische Untersuchungen (1896 [1994]), Wickseil considered how to design a voting mechanism to finance public goods and assure a just distribution of the tax burden. Applying the benefit principle to taxation, Wicksell argued that a unanimity-voting rule would guarantee that all individuals receive benefits commensurate to their tax cost from any public good. “No one can complain if he secures a benefit which he himself considers to be (greater or at least) as great as the price he has to pay” (Wicksell 1994, p. 79). Wicksell's primary interest was not in determining the appropriate mix of public and private, instead he demonstrated how one might finance public expenditures provided the decision of the mix has already been made. The actual voting mechanism is much less controversial than the philosophy and antecedent assumptions behind the process. While Musgrave and Buchanan share common ground, agreeing to the originality of Wicksell's work, and the necessity of considering the rules by which social decisions are made, their views on Wicksell are generally acknowledged to be radically different (Bernd Hansjurgens 1999, Pieter Hennipman 1982, David Riesman 1990).

Date: 2006
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