Stability of Constitutions

Constitution is a pair of rules   ( s ,  S )   that are used in a voting situation. The rule  s  is used to vote about the existing alternatives and the rule  S  is used to vote about changing the rule  s  to some other rule    s '  . We consider what kind of constitutions are likely to emerge as prominent ones if the constitutions contain more than just two rules. In a constitution that contains any number of rules the  n th rule is used to decide about the    n  − 1 th   rule. We define a notion of stability for the constitutions and show that all stable constitutions roughly contain the same rule from    n  = 2   onwards. This is one explanation to the casual observation that the constitutions have usually only two rules.     

Constitutional design and economic performance

This paper is motivated by the belief that some cultural traits favor economic performance more than others. One trait examined is the ease with which individuals in a community drift away from the spirit of the law for their own benefit; this, it is argued, generates verbose legislation and high-transaction-cost institutions with deleterious effects on economic performance. An empirical comparison between the number of articles in a country's constitution, as a proxy for length and lack of simplicity, and economic performance as measured by GDP per capita finds that no country with a high GDP per capita has a long constitution or, restated, that long constitutions are invariably associated with low levels of GDP per capita.     

Leviathan: Revenue-maximizer or glory-seeker?

We argue that the Hobbesian assumption of glory-seeking behavior, especially when applied to holders of high office, is both more realistic and has greater predictive power than Brennan and Buchanan's hypothesis of revenue-maximization. Whereas traditional public finance theory sees the sovereign as a benign agent without an objective of his own and Brennan and Buchanan endow him with the objective of revenue maximization, Hobbes's political construct envisages a sovereign-principal who devises rules and incentives to induce his subjects-agents to contribute to his own preservation and glory. We examine the implications of this Copernican revolution in public finance theory by referring to Brennan and Buchanan's key claim that the Leviathan ought to be constrained by a fiscal constitution. We argue that the interplay of the pursuit glory and the concern for self-preservation implies that the government cannot be bound by rules set by citizens.     

The Nature of the State and the State of Nature: a Comment on Grady & McGuire's Paper

In 'The Nature of Constitutions', Mark Grady & Michael McGuire provide a model of the evolution and purposes of constitutions as arising to minimize appropriation by dominants of subordinates. This Comment builds on Grady & McGuire's article in three ways. First, it supplements their analysis by operationalizing a model of constitutional evolution that views constitutions as arising out of the conflict of competing high-ranking individuals to preserve their own authority. From this clash of self-interest of dominant individuals, constitutions are born. This predicts that constitutions will not simply tame all forms of appropriation, but will also hard-wire some forms of appropriation behavior into the permanent constitutional structure. Second, it examines the American constitution in light of this model to show how that constitution reflects the mixture of appropriation and appropriation-taming behavior. Third, this Comment argues that the breakdown of constitutionalism in the United States this century can be explained by a failure to fully appreciate the purposes of constitutionalism in a biological framework.     

Native American reservation constitutions

The Cherokees wrote a constitution in 1827; in contrast, the Yokuts tribe on the Santa Rosa Rancheria Reservation adopted theirs in 2014. As Native American tribal constitutions are common, I examine determinants of establishing these written constitutions. During their formation, some reservations had bands of the same tribe forced onto the same land. These reservations of forced coexistence wrote constitutions at an earlier date. More homogeneous, centralized tribes tended to adopt their constitutions at a later date, although this finding is less robust. The implication is that coordination costs were less than the benefits from constraining a potential rival band, and that social norms of centralization made having a written constitution less necessary. Additionally, a positive correlation is found between having a written constitution and economic output, similar to other studies.     

Is there a self-enforcing monetary constitution?

A self-enforcing monetary constitution has rules that agents acting within the system will uphold even in the presence of deviations from ideal knowledge and complete benevolence. It thus does not require external enforcement. What would such a constitution look like? I show that two regimes—a version of nominal gross domestic product targeting that relies on market implementation of monetary policy, and free banking—meet these requirements for self-enforcing monetary constitutions. The analysis draws insights from political economy, and from constitutional political economy in particular.     

What Belongs in a Constitution?

The essay argues that the content of constitutions should derive from its political functions: granting stability and legitimacy to government. There are three main candidates for inclusion in constitutions: regime arrangements, human rights, and general credo. All constitutions must include institutional arrangements. The level of detail and entrenchment may vary. There are important reasons for including Bills of rights in constitutions, but attention should be given to their mode of entrenchment and enforcement. Credos should only be included in constitutions if they are widely shared. In principles, constitutions should specify their modes of amendment and enforcement. If a society cannot have a widely-agreed constitution, it may be better to defer its enactment until such broad agreement is possible.     

Constitutional quandaries in Europe

Most of the constitutional political economy literature has followed Buchanan and Tullock by remaining inherently normative, but a small literature has appeared that examines the properties of constitutions by considering the motives of the people who actually write the constitution. This literature is in the positive public choice tradition, in that it assumes that the people who write a constitution are interested in advancing their interests and not those of someone else. This note discusses the need for and nature of a constitution that would advance the interests of all citizens, and then the procedures that would be necessary to create and adopt such a constitution.     

Club governments versus representative governments

The paper compares the legal rules for private clubs with the constitutions of representative governments. Though both institutions are designed to provide public goods for their members they are organized quite differently. In clubs the power to grant power must not be delegated to the agents, while in representative governments it usually is. The design of representative governments is shown to be inconsistent with a contractarian view of the constitution. A nearly perfect laboratory case for a club government can be found in the example of Switzerland. In this country citizens are absolute sovereigns over their constitution. The Swiss do not have a constitutional court, but have developed instead a system of popular voting rights serving as a substitute for a judicial review by a constitutional court. Though this system does not work perfectly, it has relative advantages compared to a constitutional court which often tends to become a political decisionmaker. The author is indebted to Pio Baake, Peter Moser, and Richard E. Wagner for helpful comments.     

THE DESIGN OF A SELF-ENFORCING MULTILATERAL AGREEMENT AMONG OIL-lMPORTING COUNTRlES

When all parties to an agreement are subject to the laws of a single jurisdiction, then anyone breaking that agreement can be subjected to legal sanctions. If, however, parties to an agreement are themselves sovereign states, no external force exists to assure compliance. In such cases the design of an agreement must somehow provide an internal enforcement mechanism or the agreement is likely to be violated. An agreement is regarded as a specification of how each party will perform in any contingency which might arise. An agreement is called self-enforcing if it provides no country with an incentive to violate its terms as long as every other country complies. This paper considers the possibility of designing self-enforcing agreements among oil-importing nations to achieve the following goals: (1) to expand government or private stockpiles in preparation for the next disruption of crude imports; (2) to insure that no country will impose price controls should an embargo occur; (3) to share restricted oil supplies during an embargo; and (4) to restrain import demand during a crisis
The paper outlines how a self-enforcing agreement to increase world stockpiles can be designed. It indicates by example measures a county can take in advance to make subsequent imposition of price controls during a crisis disadvantageous. Such measures make credible a government's prior promise not to impose price controls. While a multilateral effort to restrain demand during an embargo would be worthwhile, no self-enforcing agreement seems possible. Finally, plans to redirect limited oil supplies by fiat during an oil crisis are criticized as unnecessary, inevitably ineffective, and a diversion of collective efforts from more pressing tasks. Such a sharing agreement is the focus of the existing International Energy Program (IEP) in which the United States and 20 other oil-importing nations participate