Anthony Downs and the Equilibrium Theory of Democracy

Anthony Downs was one of the founders of public choice theory, and An Economic Theory of Democracy (1957) remains one of the most cited texts within the field. Yet there is little historical scholarship on the development of Downs’s economic theory of democracy. Seeking to close this gap this article examines core characteristics and intellectual sources of his political ideas. The article argues that the overarching feature of Downs’s oeuvre was a theory of democratic politics as an equilibrium between the demand and supply of government goods and services. It shows that Downs explicitly intended his model as an answer to the public-expenditure problem of balancing government supply of publicly provided goods with citizens’ individual demands for these goods. The article thus provides a contribution to the literature on American public finance, demonstrating how Downs drew inspiration from Joseph Schumpeter, Harold Hotelling, and Walter Lippmann to address the problems associated with discerning the demand for public goods and services