Constitutions and Economic Policy (original) (raw)

Oxford Handbooks Online, 2008

This article discusses recent empirical and theoretical research on the electoral rule, which is one feature of modern democracies. It determines that the electoral rule systematically shapes economic policy. An outline of some key objectives of electoral rules is presented in the first section; it further notes the stability and systematic selection that characterize real-world constitutions. It then introduces the main concepts that categorize different electoral rules, and explains how these elements help shape the accountability of government and the size of political rents and corruption. Finally, the article deals with representation in government and a variety of fiscal policy choices.

The economic effects of constitutions: replicating—and extending—Persson and Tabellini

Public Choice, 2009

Persson and Tabellini (2003) show that presidential regimes and majoritarian election systems have important effects on fiscal policy, government effectiveness and productivity. Here, their dataset is extended in a number of ways: the number of countries included is increased from 85 to up to 116, and more recent data for both government effectiveness and productivity are used. In replicating and extending their analyses, we find that the effect of presidential regimes on all three groups of economic variables vanishes almost entirely. With regard to electoral systems, the original results are largely confirmed: majoritarian (as opposed to proportional) electoral systems lead to lower government expenditure, lower levels of rent seeking but also lower output per worker. The institutional details such as the proportion of candidates that are not elected via party lists and the district magnitude have proved to be of particular importance. The question whether societies can improve their lot by choosing specific constitutional rules remains open.

Endogenous constitutions: Politics and politicians matter, economic outcomes don’t

Journal of Economic Behavior & Organization, 2013

We study changes in the form of government as an example of endogenously determined constitutions. For a sample of 202 countries over the period 1950-2006, we find that most changes are relatively small and roughly equally likely to be either in the direction of more parliamentarian or more presidential systems. Based on a fixed effects ordered logit panel data model estimated over the period 1951-2000 for 146 countries, we find that such changes in the constitution can be explained by characteristics of the political system, internal and external political conflicts, and political leaders, whereas economic and socio-demographic variables do not matter. Key Terms: Constitutional change, form of government, endogenous constitutions, separation of powers, relevance of leaders. JEL classification: H11, K10, P48.

Constitutional Political Economy

The Elgar Companion to Public Choice, 2nd Edition, 2013

The phrase 'constitutional political economy' has, no doubt, appeared in the literature in a variety of contexts over many years, but for our purposes the key uses of the phrase as the label for a distinctive research program developed from the use of 'constitutional economics' over the period following the publication of The Calculus of Consent (Buchanan and Tullock 1962) and became firmly established in the sub-title of The Reason of Rules , and as the name of the journal launched in 1990. 2

Constitutions and Economic Development: Evidence

2012

Constitutions and Economic Development: Evidence from the American Indian Nations * This paper presents an empirical examination of economic and institutional development. Utilizing a novel data set on American Indian tribal nations, we investigate how constitutional design affects economic development, while holding the broader legal and political environment fixed. Instrumental variables regressions, using the party of the US President at the time of the initial adoption of tribal constitutions as an instrument for constitutional design, indicate that parliamentary systems (versus presidential) have a strong positive effect on economic development, while ordinary least squares regressions of current economic outcomes on parliamentary systems of government show no effects. Robustness checks suggest that the results are not explained by differences in other institutions or geographic characteristics. Additional results provide some suggestive evidence that the effects may operate through channels that are typically associated with parliamentary systems, such as larger public employment, and more equitable income distribution.

The Economic Effects of Constitutions: What Do the Data Say

2003

This book is intended for the scholar or graduate student who wants to learn about a new topic of research: the effects of constitutional rules on economic policymaking and performance. We draw on existing knowledge in several fields: economics, political science, and statistics. In particular, the book builds on theoretical work from the last few years, and it forms a natural sequel to our previous book, Political Economics: Explaining Economic Policy, published by MIT Press in the year 2000. While the previous volume focused mainly on theory, the purpose of this new book is uncompromisingly empirical. Taking the existing theoretical work in comparative politics and political economics as a point of departure, we ask which theoretical results are supported and contradicted by the data, and try to identify new empirical patterns for a next round of theory. The empirical results we present in the book go beyond those in our recent articles and working papers on the same general topic. But there are other reasons why the entire thing is greater than the sum of its parts. We take advantage of the book format to present a more thorough discussion of measurement and methodology than is possible in a single paper. In the end, the empirical picture stands out quite clearly and convincingly, when considering a number of related issues with a similar methodology. Our decision to embark on the empirical research program resulting in the book was taken when one of us (Tabellini) gave the Munich Lectures, hosted by CES, in November 1999. At that point, we had produced several theoretical studies of constitutional rules and economic policy, but we had only started to look at the data and our empirical results were still preliminary. The comments received from the Munich audience, and in particular from Hans-Werner Sinn and Vito Tanzi, were an essential input and inspiration for the research that followed. The warm hospitality and the outstanding atmosphere of excitement and enthusiasm at CES made those lectures a particularly memorable event. Another event that helped focus our minds, when this project was further under way, was the Walras-Bowley Lecture, given by one of us (Persson) at the Econometric Society World Congress in Seattle, August 2000. On this occasion, as well, we obtained important feedback that led to major improvements in our research. After having completed a first full draft, in May 2002, we had the opportunity to present overviews of the manuscript to different audiences in Uppsala, Princeton, Harvard, the European Science Days in Steyr, Austria, and the Yrjö Jahnsson Foundation, in Helsinki. At these presentations, and at numerous seminars on the underlying research papers, many colleagues made insightful comments that improved the quality of our research. Here, we particularly want to thank our colleagues who generously gave up their time for reading and commenting on the first draft:

The Economic Effect of Constitutions: What Do They Say?

Constitutions and Economic Policy (original) (raw)

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