We develop a kinetic theory of point vortices in two-dimensional hydrodynamics taking collective effects into account. We first recall the quasilinear theory of Dubin and O'Neil (1988 Phys. Rev. Lett. 60 1286) based on the Klimontovich equation and leading to a Lenard-Balescu-type kinetic equation for axisymmetric flows. When collective effects are neglected, it reduces to the Landau-type kinetic equation obtained independently in our previous papers (Chavanis 2001 Phys. Rev. E 64 026309; 2008 Physica A 387 1123) for more general flows. We also consider the relaxation of a test vortex in a 'sea' (bath) of field vortices. Its stochastic motion is described in terms of a Fokker-Planck equation. We determine the diffusion coefficient and the drift term by explicitly calculating the first-and second-order moments of the radial displacement of the test vortex from its equations of motion, taking collective effects into account. This generalizes the expressions obtained in our previous papers. We discuss the scaling with N of the relaxation time for the system as a whole and for a test vortex in a bath.