Abstract
Over the past decade two major intellectual developments (some would call them revolutions) have had a major impact on how economists and policymakers think about the way policies affect economies. The first of these revolutions is associated with a growing body of literature that goes under the name of “public choice.” In 1986 James Buchanan received a Nobel Prize in economics for his seminal contributions to this literature. The second is the less unified, but highly influential, thinking that goes under the name of supply-side economics. Supply-side economics had its major expression in the United States under the Reagan Administration. Its influence has progressively spread to other countries, both developed and developing.
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