Virginia school of political economy

The Virginia school of political economy is a term applied to a school of economic thought centred on universities in Virginia, most notably George Mason University, Virginia Tech, Hampden-Sydney College and the University of Virginia, and mainly focusing on public choice theory and law and economics. Prominent economists identified with the school include Walter E. Williams, James M. Buchanan, Gordon Tullock, Randall Holcombe and G. Warren Nutter. It is also appropriate to include Ronald Coase, as he was central in developing the Virginia school research program of comparative institutional analysis.

The Virginia approach to political economy focuses on comparing private and public sector institutions as imperfect alternatives. The Virginia approach is also favored by some economists of the Chicago-UCLA and Austrian schools. Virginia School economists are often seen as 'fellow travelers' with Austrian economists, as members of both schools of economic thought generally favor free-market outcomes.

There are several main lines of research in the Virginia School. James Buchanan and Gordon Tullock were among the earliest economists to apply economic analysis to national constitutions. Tullock also founded the modern rent seeking literature. Mancur Olson founded modern research on collective action and special interest groups. Olson was not at GMU, Virginia, or Virginia Tech, but Virginia scholars tend to emphasize special interest group bias in government. Coase founded the modern Law and Economics literature and the modern transaction cost theory of organization.^{[citation needed]}

The Public Choice Society and The International Society for New Institutional Economics are outgrowths of the Virginia School.