No full-text available
To read the full-text of this research,
you can request a copy directly from the author.
Is There an Optimal Constitution?
Abstract
The optimal constitution is one that protects people from politicians'' thirst of power and preserves citizens'' civic virtues. This paper presents a model that blends David Hume''s (1741) consideration that in politics every man ought to be supposed a knave, with John Stuart Mill''s (1861) conception of self-interested politicians. The optimal constitution is proved to be feasible. However, there are two possible equilibria, the Frey and Brennan-Buchanan equilibrium. It is shown that Bruno Frey''s (1997) crowding-in and crowding-out analysis is a particular case of our model. In the Brennan-Buchanan equilibrium there is a long-run neutrality of enforcement on citizens'' performance. In general, a trade-off is expected between the optimal number of laws and enforcement. The comparison between the equilibria shows that the Frey equilibrium is the best option to enhance the civic virtues of citizens, while the Brennan-Buchanan equilibrium is the best way to deter the ambitions of self-interested politicians.
... David Hume provides the classic statement of worstcase theorizing about government in political economy: " Political writers have established it as a maxim, that, in contriving any system of government, and fixing the several checks and controuls of the constitution, every man ought to be supposed a knave, and to have no other end, in all his actions, than private interest " (Hume 1985a [1752], pp.42-43). Hume's worstcase model of government has attained canonical status in the contemporary constitutional political economy literature (see, e.g., Levy 2002; Brennan and Buchanan 1980, 1985; Sutter 1998; Faria 1999). ...
... David Hume provides the classic statement of worstcase theorizing about government in political economy: " Political writers have established it as a maxim, that, in contriving any system of government, and fixing the several checks and controuls of the constitution, every man ought to be supposed a knave, and to have no other end, in all his actions, than private interest " (Hume 1985a [1752] , pp.42-43). Hume's worstcase model of government has attained canonical status in the contemporary constitutional political economy literature (see, e.g., Levy 2002; Buchanan 1980, 1985; Sutter 1998; Faria 1999). J. M. Buchanan – a founding father of constitutional political economy – is (perhaps) uniquely responsible for the revival of worst-case theorizing about government in modern political economy (see, Levy 2002). 1 Worst-case theorizing about government à la Buchanan necessitates adherence to a principle of motivational homogeneity or symmetry: private and public chooser alike are modelled as pursuing their private interest. ...
Robust political economy built on worst case assumptions must carefully state joint hypotheses as the best or worst case nature of individual assumptions can hinge critically on these joint assumptions. Where benevolence is assumed, ignorance is the appropriate worst-case informational assumption; however, when planner benevolence is in doubt, a planner endowed with calculative efficacy is the appropriate joint worst-case assumption.
... Boettke, Coyne, and Leeson (2008: 338) use the Greek term "metis" to convey culture: 1 Berkowitz, Pistor, and Richard (2003) detail, empirically, the importance of the way a country adopts a law for its economic development. Faria (1999) shows that, in a model of constitutional choice, it is possible to obtain two equilibriums: one that seeks to restrict political power, the other that seeks to foster civic virtues. The importance of culture fi rst appeared in the theoretical literature with game theory (see, for example, Greif 2005 Metis is characterized by local knowledge resulting from practical experience. ...
There are many studies on the relationship between economic development and institutions. Institutions can be classified as formal or informal. This article emphasizes the importance of the relationship between culture (informal institutions) and the quality of public goods supplied by the government, using a measure of state failure: the Failed States Index. The results suggest that culture is more important than formal institutions in explaining differences in the degree to which states fail.
Objetivo: A obtenção do número adequado de órgãos cadavéricos para transplantes é um item de política pública importante. Modelos econômicos tradicionais supõem que a solução pode ser obtida por incentivos financeiros. Críticos dessa abordagem insistem que o mercado não resolve o problema, mas a intervenção estatal sim. Métodos: Este artigo apresenta o modelo do homo economicus maturus de Frey (1997), cujo principal mérito é mostrar que ambas as críticas estão incorretamente colocadas, pois indivíduos respondem não apenas a incentivos monetários de forma positiva, como demonstram os modelos tradicionais, mas também podem apresentar reações psicológicas adversas. Esse modelo é aplicado ao dilema da doação de órgãos com a inclusão do fator tecnológico, por meio da substituição de órgãos humanos por órgãos não humanos (xenotransplantes). Resultados: O principal resultado do artigo é mostrar como um avanço tecnológico pode melhorar o bem-estar sem alterar o dilema moral dos indivíduos. Conclusões: A extensão do modelo econômico tradicional permite uma análise com novas possibilidades acerca de mudanças tecnológicas e dos dilemas morais que elas podem trazer.
Can we model politics as exclusively based on self-interest, leaving virtue aside? How much romance is there in the study of politics? We show that James Buchanan, a founder of public choice and constitutional political economy, reintroduces a modicum of romance into politics, despite claiming that his work is the study of “politics without romance”: Buchanan’s model needs an ethical attitude to defend rules against rent-seeking.
We claim that Adam Smith, more than David Hume, should be considered one of the primary intellectual influences on Buchanan’s public choice and constitutional political economy. It is commonly believed that Hume assumes in politics every man ought to be considered a knave, making him an influence on Buchanan’s idea of politics without romance. Yet, it is Smith who, like Buchanan, describes rent-seeking and suggests that public virtues may be the remedy through which good rules maintaining liberty and prosperity can be generated and enforced. Smith, like Buchanan, rejects sole reliance on economic incentives: the study of politics needs some romance.
The motivation crowding out effect suggests that external intervention via monetary incentives or punishments may undermine, and under different identifiable conditions strengthen, intrinsic motivation. Over the last few years the motivation crowding out effect has been integrated into economic theory and became the subject of discussion about the possibilities of development of more general human behavior model in the non-market economics. This study demonstrates that the effect is also of relevance in the constitutional policy. The methodological possibilities and limits of constitutional economics in the relationship to the motivation crowding out effect are discussed in this paper.
This working paper is now forthcoming in D. Levy and S. Peart, eds., The Street Porter and the Philosopher: Conversations on Analytical Egalitarianism. Ann Arbor: University of Michigan Press, 2006. This paper began with Hume’s warning concerning political knavery. In Hume’s terms, the welfare losses attributable to one vice (or imperfection), namely, that of planner self-interest, are attenuated by that of low calculative efficacy. Thus, to cure one vice (low calculative efficacy), without also replacing planner self-interest with planner benevolence, would simply exacerbate welfare losses.
The present paper consists of two closely related parts: one which outlines a normative criterion for evaluating the legitimacy of constitutional change and one which specifies a particular proposal of a constitution. The criterion used stems directly from the 'pragmatic' brand of contractarianism developed by Buchanan, where an approximate rule of unanimity is utilized. The proposal aims at the highest possible freedom of choice for individuals when it comes to defining the political system of their liking: a core (dealing with public goods and rights) is common for all but everything else can vary between different subconstitutions between which individuals choose. Copyright 1996 by Kluwer Academic Publishers
• Those who have done me the honor of reading my previous writings will probably receive no strong impression of novelty from the present volume; for the principles are those to which I have been working up during the greater part of my life, and most of the practical suggestions have been anticipated by others or by myself. There is novelty, however, in the fact of bringing them together, and exhibiting them in their connection, and also, I believe, in much that is brought forward in their support. Several of the opinions, at all events, if not new, are for the present as little likely to meet with general acceptance as if they were. It seems to me, however, from various indications, and from none more than the recent debates on Reform of Parliament, that both Conservatives and Liberals (if I may continue to call them what they still call themselves) have lost confidence in the political creeds which they nominally profess, while neither side appears to have made any progress in providing itself with a better. Yet such a better doctrine must be possible; not a mere compromise, by splitting the difference between the two, but something wider than either, which, in virtue of its superior comprehensiveness, might be adopted by either Liberal or Conservative without renouncing any thing which he really feels to be valuable in his own creed. When so many feel obscurely the want of such a doctrine, and so few even flatter themselves that they have attained it, any one may, without presumption, offer what his own thoughts, and the best that he knows of those of others, are able to contribute toward its formation. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
• Those who have done me the honor of reading my previous writings will probably receive no strong impression of novelty from the present volume; for the principles are those to which I have been working up during the greater part of my life, and most of the practical suggestions have been anticipated by others or by myself. There is novelty, however, in the fact of bringing them together, and exhibiting them in their connection, and also, I believe, in much that is brought forward in their support. Several of the opinions, at all events, if not new, are for the present as little likely to meet with general acceptance as if they were. It seems to me, however, from various indications, and from none more than the recent debates on Reform of Parliament, that both Conservatives and Liberals (if I may continue to call them what they still call themselves) have lost confidence in the political creeds which they nominally profess, while neither side appears to have made any progress in providing itself with a better. Yet such a better doctrine must be possible; not a mere compromise, by splitting the difference between the two, but something wider than either, which, in virtue of its superior comprehensiveness, might be adopted by either Liberal or Conservative without renouncing any thing which he really feels to be valuable in his own creed. When so many feel obscurely the want of such a doctrine, and so few even flatter themselves that they have attained it, any one may, without presumption, offer what his own thoughts, and the best that he knows of those of others, are able to contribute toward its formation. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
I. Introduction Since the turn of the century, legislation in Western countries has expanded rapidly to reverse the brief dominance of laissez faire during the nineteenth century. The state no longer merely protects against violations of person and property through murder, rape, or burglary but also restricts "dis crimination" against certain minorities, collusive business arrangements, "jaywalking," travel, the materials used in construction, and thousands of other activities. The activities restricted not only are numerous but also range widely, affecting persons in very different pursuits and of diverse social backgrounds, education levels, ages, races, etc. Moreover, the likeli hood that an offender will be discovered and convicted and the nature and extent of punishments differ greatly from person to person and activity to activity. Yet, in spite of such diversity, some common properties are shared by practically all legislation, and these properties form the subject matter of this essay. In the first place, obedience to law is not taken for granted, and public and private resources are generally spent in order both to prevent offenses and to apprehend offenders. In the second place, conviction is not generally considered sufficient punishment in itself; additional and sometimes severe punishments are meted out to those convicted. What determines the amount and type of resources and punishments used to enforce a piece of legislation? In particular, why does enforcement differ so greatly among different kinds of legislation?
This paper outlines a preliminary radical plan for a constitution based primarily on recent contributions on mechanisms for choice of public goods and on constitutional rules and concepts, but based also on experience with present constitutions, corporate charters, and private arbitration procedures. It uses the standard economic perspective, disregarding such motives as herd instincts and the desire to serve the public interest. The result is markedly different from existing constitutions. Copyright 1997 by Kluwer Academic Publishers
The author distinguishes between normative and positive constitutional economics. Taking the observation that the normative branch of the new discipline is much better developed that its positive counterpart as a starting point, the available positive literature is surveyed nevertheless. The available evidence is arranged into four categories: (1) constitutional rules and the procedures bringing them about, (2) constitutional rules as the result of preferences and restrictions, (3) constitutional rules channeling constitutional change, and (4) the economic effects of constitutional rules. Additionally, various concepts of the constitution are presented, the tools suited for a positive theory of constitutional economics discussed, and precursors as well as related research programs shortly described. Copyright 1997 by Kluwer Academic Publishers
When discussing constitutional design, economists concentrate on the propensity of individuals to free ride. Preventing opportunistic behavior by knaves has costs by crowding out civic virtue. Another view emphasizes active citizen participation in order to bolster civic virtue. A viable constitution must therefore be strict enough to deter exploitative behavior. At the same time, the constitution should fundamentally convey trust towards its citizens and politicians. Distrusting public laws risk destroying the positive attitude of citizens and politicians towards the state. Civic virtue can be maintained and fostered by direct citizen participation via popular referenda and initiatives. Copyright 1997 by Royal Economic Society.
for a complete survey on the subject Toward a New Constitution for a Future Country
- See Voigt
See Voigt (1997) for a complete survey on the subject. References Bailey, M. J. (1997) " Toward a New Constitution for a Future Country. " Public Choice 90: 73–115.
Of the Independency of Parliament. Essays, Moral, Political and Literary.” In: Theory of Politics
- D Hume
Constitutional Economics The New Palgrave: The World of Economics
- J M Buchanan