Standard Setting and the Theory of Institutional Choice

The first elements of a theory of closed behavioral systems, or, more specifically, of a theory of institutional choice, have emerged in the last ten or fifteen years. Buchanan and Tullock (1962), Buchanan and Tollison (1972), Olson (1965), Posner (1974), Goldberg (1974), may be mentioned among the major contributions to the theory. What is common to these different theorists, whose viewpoints arc certainly not homogeneous and whose policy conclusions are often contrasting, is their interest in studying the behavior of people who, in pursuing their own self-interest, try to influence the public choices of institutional constraints. These constraints, once adopted, apply to all members of the community or to well-defined sections of it. Institutional choice differs from the kind of choice situations traditionally considered in economics, since the consequences of the adoption of a given system of institutional constraints cannot be assessed in relation to a single decision, but must be evaluated with respect to streams of future decisions made by a variety of more or less autonomous agents