From Schumpeterian Democracy to Constitutional Democracy

A critical issue of a constitutional democracy is to determine an optimal limitation of citizens' political liberties. This problem is analysed here within the framework of a parliamentary system of government, and in the context of Rawls' principle of equal political participation. It is argued that optimal barriers to entry into political competition are a function of the legislative decision rules, the domain of collective choices, and the rules for selecting (and dismissing) the executive. Contrary to Schumpeter and Riker who rejected populism (the approach that public policy should be a result of citizens' preferences), we argue that it is possible to reconcile greater citizen participation and liberal democracy with an appropriate institutional design.     

Constitutional Origins of Dictatorship and Democracy

Many emerging democracies across the globe are scrambling to craft new constitutions. The modal constitution being chosen in this most recent wave of democratization is a rather unknown, and under-theorized, type: semi-presidentialism. This article brings semi-presidentialism back to comparative constitutional theory, distinguishing it from presidentialism and parliamentarism, and guarding against its hasty export to new democracies. This article details when, and why, semi-presidentialism can be problematic from the standpoints of democracy, constitutionalism, and the protection of fundamental rights; and the conditions under which it can be supportive of them. After establishing the analytical framework, this article compares developments in two important historical cases of regime change under semi-presidentialism, cases which have also been among the most influential countries for European politics in the twentieth century: the French Fifth Republic and Weimar Germany. The concluding section draws the evidence together.     

论中国政治市场开放进程中宪政民主与基层民主的协调发展

建构一个有效的政治市场,是中国民主政治发展固有之义,关系到社会主义体制改革的成败,中国最高决策层有意识地选择上下互动的民主政治发展路径,这同苏东原社会主义国家体制改革有别,但这条路径选择并没有消除民主政治发展战略中基层民主优先和宪政民主滞后的矛盾。当务之急是在民主政治实践中高度注重宪政民主与基层民主的协调发展。     

Democracy vs. dictatorship

A democratic society is often regarded as a prerequisite for economic growth and development. Yet, most empirical studies are not capable of identifying a positive link between GDP growth and democracy indexes. In addition, it is a stylized empirical fact that: (i) most developing countries are dictatorships; and (ii) many poor dictatorships have experienced high growth performances and emerged from poverty such as South Korea, China and Egypt. Against this background, it is of interest to analyse in which ways the growth performance between autocratic and democratic economies may differ, in particular among low-income countries. To answer this question, we compare the endogenous growth paths of two economies that differ only in their political regimes in the context of an overlapping generations model. The key features of the model are: (i) a positive bequest motive in the form of investments in education or productive public capital (infrastructure); (ii) a higher marginal (inter-temporal) utility of consumption today versus consumption tomorrow in low-income countries (for example, subsistence level of consumption); and (iii) a dictator that cares about her income or the income of her dynasty tomorrow. In this framework, we demonstrate that poor but large and stable dictatorships exhibit a higher equilibrium growth rate than comparable (equally poor) democracies. Moreover, there exists a particular threshold value in income such that the growth-reducing impact of dictatorial consumption (corruption) outweighs the higher (initial) public investments. Above this, the growth rate under democracy dominates the one in dictatorship.     

Dennis C. Rasmussen,The Infidel and the Professor: David Hume,Adam Smith,and the Friendship That Shaped Modern Thought

The Review of Austrian Economics -     

Constitutions as Commitment or Coordination Device? Comment on C. Azariadis and V. Galasso: Constitutional “Rules” and Intergenerational Fiscal Policy

In a recentcontribution to Constitutional Political Economy, Azariadis andGalasso argued that due to the fact that constitutions allowfor a partial precommitment of the individuals, constitutionalrules are a good means to guarantee an efficient level of redistributionbetween generations. I argue that constitutional rules have noinherent advantage with respect to commitment compared to otherrules. However, the beneficial role of constitutions stems fromtheir ability to create a focal point that helps to solve theequilibrium selection problem.     

社会资本与草根民主——罗伯特·帕特南的《使民主运转起来》

文章回顾了历史以来关于民主理论的研究 ,认为帕特南于 1993年发表的《使民主运转起来 :现代意大利的公民传统》是近年来西方民主理论研究方面影响最大的著作之一。作者对《使民主运转起来》一书的宗旨、理论框架、主要观点及其创新之处进行了评论 ,指出“社会资本”是《使民主运转起来》引入的最重要的分析范畴 ,而《使民主运转起来》的出版无疑有力地推动了西方民主理论的发展。     

Credible Currency: A Constitutional Perspective

By contrast to private banks, public monetary authorities – central banks and currency boards – have limited credibility in making redemption or fixed-exchange-rate commitments. Their sovereign immunity obviates legal penalties for devaluing, and their monopoly status weakens reputational penalties. The softness of central bank promises invites speculative attack and currency crises. Privatization and decentralization of exchange-rate commitments provides a more credible currency by making redemption commitments legally enforceable and reputable. This contrast sheds light on (1) the breakdown of the classical gold standard and (2) the costs and benefits of dollarization. JEL Classification: E42, H42.     

Constitutional renegotiation: Impediments to consensual revision

In a post-constitutional context, restructuring of constitutional rights often fundamentally alters the role and scope of government. It is therefore important to assess the extent to which consensuality is likely to characterize the process of constitutional revision. This article provides theoretical and empirical grounds for concluding that nonconsensual constitutional revision is often the rule rather than the exception. The endogeneity of politically relevant transaction costs and their manipulation by self-interested political actors in a post-constitutional environment are central to the analysis. I wish to thank Robert Higgs and this journal's referee for helpful comments on an earlier draft.     

Democracy and Growth: Alternative Approaches

This article focuses on two previously unexamined aspects of the relationship between economic growth and democracy. First, the growth experiences of countries that experience significant changes in democracy are examined directly. Countries that democratize are found to grow faster than a priori similar countries, while countries that become less democratic grow more slowly than comparable countries. These differences do not seem to be due to differences in education or investment levels. Second, regression tree analysis suggests that democracy, along with initial income and literacy, contributes to the identification of regimes of countries facing similar aggregate production functions.