ECONOMY

chapter 21
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SOCIAL CHOICE
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hervé moulin
1 Introduction
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Social choice is part and parcel of the formal and axiomatic revolution that took
over economic analysis and, to a lesser degree, political and other social sciences in
the middle of the twentieth century. In the shadow of game theory and of the theory
of general equilibrium, social choice theory focuses on the normative foundations of
political and economic institutions.
Understanding the depth of Arrow’s celebrated impossibility theorem was its sole
agenda until the beginning of the 1970s, a line of research that has all but died out in
the last three decades. Saari (this volume) offers a refreshing viewpoint on a whole
range of impossibility results. The current research retains the social engineering
spirit of Arrow’s aggregation of preferences, while reaching out to a much broader
set of resource allocation problems. A good example of this enlarged vision is “fair
division” (Brams, this volume): developed by mathematicians such as Steinhaus in
the 1940sand1950s, then by economists like Foley, Kolm, and Varian in the 1960sand
1970s, it is now a mainstream subject within the field of social choice.
In economics the social engineering approach is called “mechanism design.” It
inspires a large body of research in microeconomic theory, addressing mostly positive
(descriptive, predictive) issues, e.g. the influence of auction design on the seller’s revenue.
The social choice component of mechanism design specializes in the normative
aspects of mechanism design, and has evolved into a broad theory of distributive
justice.
This brief overview concentrates on the interface between traditional notions of
endstate justice such as welfarism (Blackorby and Bossert, this volume) and the more
modern theme of strategic implementation, bringing the full methodological benefit
∗ I am very grateful to the editors for critical comments on an earlier draft.