Abstract

Public choice theory presents itself as a new institutional economics that rectifies the failure of the neo-classical tradition to treat the institutional dimension of economics. It offers criticism of both neo-classical defenders of cost-benefit analysis and their environmental critics. Both assume the existence of benign political actors. While sharing some of its scepticism about this assumption, this paper argues that the public choice perspective is flawed. The old institutionalism of classical economics provides a better perspective to examine both explanatory and nonnative problems occasioned by environmental problems than does the new institutionalism, raising significant questions about the relationship between environmental goods, virtues and institutions which have been lost to recent discussion.