A short history of liberalism in contemporary Iran

Constitutional Political Economy - The present article explores how liberalism and modern thoughts entered Iran and how they influenced political thought and institutions in contemporary Iran. It...     

Liberal constitutionalism,constitutional liberalism and democracy

The tension that is often seen to exist between the ideals of liberalism and of democracy is examined in this paper in light of the distinction between two liberal outlooks at constitutional regimes, namely, on the one side, a liberal constitutionalism that focuses on the need to provide institutional safeguards of individual liberty as private autonomy and, on the other hand, a constitutional liberalism that focuses on the need to respect the freedom of individuals to choose the constitutional environment in which they wish to live. It is argued that a liberalism that consistently extends its fundamental ideal of individual sovereignty to the level of constitutional choice can be reconciled with the basic democratic ideal of citizen sovereignty.     

Credible commitments and constitutional constraints: state debt repudiation and default in nineteenth century America

Between 1839 and 1842 the United States suffered through an acute debt crisis. Over this period, eight states and one territory defaulted, five of which outright repudiated all or parts of their outstanding debts. However, for many of those same states, reentry into capital markets occurred relatively rapidly and at rather favorable terms. The question then arises, how and why was this possible? This work attempts to explain this phenomenon by suggesting that soon after default or repudiation many states enacted constitutional amendments meant to significantly constrain and credibly commit future governments from overextending credit and simultaneously to pursue time-consistent public policy. I explore this by examining the impact that these newly imposed constitutional amendments, which limited both the type and amount of debt and created stronger procedural safeguards for issuing debt, had on average bond prices, gathered from New York market data. Overall, my results show that newly constrained states had higher average bond prices than states that did not impose constitutional limits on debt financing, suggesting that markets did, in fact, perceive these constitutional changes to be binding and credible.     

A constitutional theory of public enterprise

This article rationalizes public enterprise by analyzing the constitutional choice between private and public ownership of production arrangements. Arguing that results depend on who does the choosing, the article compares choices by self-governing citizens with choices by self-directed governmental officials. The resulting institutional theory identifies four conditions that cause citizens to favor public over private ownership. None of the conditions refers to the standard concept of economic efficiency, which guides most economic comparisons of public and private enterprise.     

The origins and evolution of democracy: an exercise in history from a constitutional economics approach

In this article the conditions for the rise and fall of representative regimes are explored. High citizen mobility and unexploited opportunities for investment create the need of reassuring factor owners against the tax hunger of the State. This may lead to the emergence of representative institutions of government, a process that reverts when those conditions disappear. Factors that facilitate or restrain the mobility of citizenry are identified, mainly in the domain of military technology. Thus, a number of interrelations between production and war technologies, political development and economic performance are revealed, giving rise to an interpretation of historical evolution.

A framework for the study of firms as constitutional orders

Much of the literature on corporate performance focuses on institutional restructuring, and implicitly assumes that constitutional factors are determined exogenously. Existing theories of the firm—whether a “goal paradigm” or an “exchange paradigm”—provide useful insights; but we find them incomplete because they miss the extent to which companies build unique and meaningful constitutional orders. Building on Vanberg (Const Polit Econ 3(2):223–253, 1992), we investigate the extent to which the field of constitutional political economy (CPE) can improve our understanding of organisations, by providing a typology of CPE that can be applied to a study of firms. We make a distinction among (1) operational; (2) institutional; and (3) constitutional levels of management, and based on the CPE literature argue that “constitutional” considerations help us to define the boundaries of a firm and its operational environment.     

The ethical foundations of constitutional order: A conventionalist perspective

This paper presents a conventionalist or modified contractarian perspective on constitutional and legal theory as a platform from which to address five important questions about the connections between critical morality and constitutional order. It finds that natural law and critical morality are inappropriately linked to constitutions and laws, but that there is nonetheless a clear moral dimension to all law. Furthermore even though law is explained as a function of human agreements, the very process of agreement commits law to an inherent set of standards which distunguish laws based on agreement from those which rest on coercion. These standards are more familiarly known as the principles of the rule of law.     

Consent,democracy and the future of liberalism

The Review of Austrian Economics - In this paper, I examine the ways in which liberal theory and democratic procedure have sought to address the justificatory challenge posed by the existence of...     

State provision of constitutional goods

This paper investigates the impact of constitutional rights on the level of public expenditure in a large sample of countries. To do so, we construct a panel of 73 countries from 1960 to 2011. We first investigate factors that drive constitutional changes regarding constitutional rights. To address potential endogeneity concerns in the choice of constitutional rules, we rely on an instrumental variable within estimation (country and time fixed effects) to estimate the impact of constitutional rights on government size. We find that larger governments tend to inscribe fewer rights in their constitutions, but we do not detect any impact of constitutional rights on the government size.     

The domain of constitutional economics

Constitutional political economy is a research program that directs inquiry to the working properties of rules, and institutions within which individuals interact, and the processes through which these rules and institutions are chosen or come into being. The emphasis on the choice of constraints distinguishes this research program from conventional economics, while the emphasis on cooperative rather than conflictual interaction distinguishes the program from much of conventional political science. Methodological individualism and rational choice may be identified as elements in the hard core of the research program. Paper prepared for Liberty Fund Symposium on “German Ordnungstheorie and American Constitutional Economics” Bonn, 3–6 June 1989.     

The political economy of constitutional choice: a study of the 2005 Kenyan constitutional referendum

Recent studies of the linkages between the wealth of nations and the institutions of governance suggest that concentrating political power in a monarchy or a ruling coalition impedes economic growth and, moreover, that while power-diffusing reforms can enhance the wellbeing of society in general, opposition by groups benefiting from the status quo is predictable. In November 2005, Kenyans rejected a proposed constitution that, despite promises made by their new chief executive, would not have lessened the powers of the presidency. Using a unique, constituency-level dataset on the referendum vote, we estimate a model of the demand for power diffusion and find that ethnic groups’ voting decisions are influenced by their expected gains and losses from constitutional change. The results also highlight the importance of ethnic divisions in hindering the power-diffusion process, and thus establish a channel through which ethnic fragmentation adversely impacts economic development.     

Fragile democracies and constitutional crises: a laboratory for studying the role of constitutional constraints

Constitutional Political Economy -     

The politics of constitutional amendment in postcommunist Europe

This paper analyzes the causes and consequences of constitutional amendments in Eastern Europe. Its results challenge the conventional wisdom that constitutional change is a consequence of institutions and that major changes will increase executive powers and limit rights. It finds that the political and social context rather than institutions is the main cause of amendments. These amendments moreover tend to reduce the power of executives and strengthen guarantees of human rights. The paper attributes these results to the particular circumstances of the postcommunist transition.

A century of economic growth in Latin America

This paper makes a contribution to the study of economic growth in developing countries by analyzing the six largest Latin American economies over 105 years within a two-equation framework. Confirming previous findings, physical and human capital prove to be key determinants of GDP per head growth. However, a more controversial result is an overall negative conditional correlation between trade openness and GDP per head growth — though openness has a positive link via investment. The evidence also shows that macroeconomic instability has been a drag on long-term growth in the region.     

A proposal for a more objective measure of de facto constitutional constraints

In this paper we propose two new indicators of de facto constitutional constraints. The indicators are based on the presence or the absence of easily observable political events. This makes the proposed measures relatively objective and easy to verify relative to the most widely used indicators of de jure and de facto constitutions. This paper describes the indicators and demonstrates their usefulness for research on economic development.     

The limits of liberalism: Good boundaries must be discovered

Determining good boundaries for governance jurisdictions is among the most difficult problems in political theory and political philosophy. But to whom the rules of a given jurisdiction applies is a problem that afflicts private as well as public governance. Clubs have boundaries no less than cities, states, or nations. This essay applies Hayek’s conception of competition as a discovery procedure to boundary problems, arguing that good jurisdictional boundaries are subject to a great deal of contingent variation according to particular the conditions of time and place. Philosophical speculation, therefore, cannot fully replace a trial and error process that facilitates social learning about where good boundaries fall. I outline the features of good boundaries that make them subject to such variation, then evaluate two criteria for evaluating whether existing jurisdictional boundaries are good: one that emphasizes ex ante consent to boundaries, and one that focuses on the ability of individuals to exit from jurisdictions ex post, arguing that the exit-focused approach is underappreciated.