The taming of Leviathan: Competition among governments

This paper assesses the consequences of a high degree of international capital mobility for the behavior of governments. It is argued that countries can be seen as clubs where the government as club management acts as an entrepreneur attempting to attract internationally mobile resources. Within this stylized model it is shown that competition induces the government of a small democratic country to implement policy reforms that increase the welfare of domestic residents if it wants to be reelected. This result suggests that international openness may be a substitute for more overt attempts to contain a government's Leviathan tendencies such as constitutional amendments. Finally, the case against competition among governments is analyzed from the perspective of the club model developed in the paper. An earlier version of this paper appeared as Kiel Working Paper No. 458. The author would like to thank Hartmut Kliemt, Werner Pommerehne, Helmut Reisen, Pierre Salmon, Horst Siebert, Viktor Vanberg as well as seminar participants at the University of Munich, the Free University of Berlin, the OECD Development Centre in Paris and at the 1991 meeting of the European Public Choice Society in Beaune for helpful comments. All remaining errors are mine.     

On the inevitability of divided government and improbability of a complete separation of powers

This paper provides a tightly written overview and modest extension of the constitutional exchange and evolution model developed in Perfecting Parliament and uses that approach to analyze the division of authority that one would expect to see in contemporary constitutional governments. The analysis suggests that constitutions tend to be written, based on the king and council template, and buttressed by a more or less independent court system. Moreover, it suggests that constitutions change at the margin through time as constitutional bargaining takes place. This suggests that a complete separation of power is unlikely to be observed in the long run. Empirical evidence developed from the IAEP data base is consistent with these predictions.     

Constitutional safeguards against centralization in federal states: An international cross-section analysis

This paper contains an international cross-section analysis of the share of central government expenditure in total government expenditure for a sample of about 50 countries and a subsample of 23 industrial countries in 1989–91. The expenditure shares, their changes and the unexplained residuals for each country are reported in Table 1. As the analysis demonstrates, the share of central government is significantly lower, if income per capita and the country's area are large and if it is a federal state. The explanatory power of the equation rises considerably if the binary dummy for federalism is replaced by quantitative constitutional variables. The most powerful single explanatory variable is the age of the constitutional court in the complete sample or the constitutional court's independence of union institutions in the sample of industrial countries. The equation's explanatory power (adjusted for degrees of freedom) can be raised by allowing also for the degree of control which provincial institutions have over the constitution and over the second chamber and by taking into account whether an increase in federal tax rates requires a popular referendum. Other types of constitutional referenda and the relative age of the federal constitution do not seem to matter. Among the federal states, the share of central government is much larger than predicted in the United States and Mexico, and it is much smaller than predicted in Argentina and Canada. The constitutional variables are particularly helpful in explaining the relatively small share of central government in Switzerland, Malaysia, Germany and Austria. The last section draws conclusions for the design of constitutions with some special applications to the European Union.     

Stability of revolutionary governments in the face of mass protest

Why do some newly introduced revolutionary governments face anti-government demonstrations and swiftly exit office, while others are able to establish political regimes that last for decades? Historical evidence finds revolutionary governments in the first decade of twenty-first century to be three times more vulnerable to mass protest than a hundred years ago. What can explain this trend? This paper relates the stability of newly emerged revolutionary governments to the political composition of the protest that brings a new incumbent to power and in factors that can shape it. Our theoretical model, incorporating protest into a dynamic Downsian framework, features the significant role of protest coordination, communication technology, ideology, and the coercive capacity of the regime. This paper contributes to the literature in several ways. First, it discusses a new historical trend of instability of revolutionary governments. Second, it proposes a model that helps to understand the growing instability of revolutionary regimes, as well as conditions that undermine stability. In equilibrium, it is possible to have a revolutionary government overthrown by popular uprising, despite the fact that it gained power on the wave of popular support. Third, we demonstrate that under a set of conditions, the new incumbent would always come from a different part of political spectrum compared to the current leader.     

Coalition governments and comparative constitutional design

In this paper we present a structural approach to the study of government formation in multi-party parliamentary democracies. The approach is based on the estimation of a stochastic bargaining model which we use to investigate the effects of specific institutional features of parliamentary democracy on the formation and dissolution of coalition governments. We illustrate our methodology by presenting the results of two (counterfactual) experiments of comparative constitutional design.     

有限理性地方政府之间的引资博弈分析

引进外贵促进本地经济发展一直是我国各级地方政府的工作重点之一.外资始终是稀缺的,为获得更多的外资流入本地区,各地方政府之间不可避免地展开了有形或无形的招商引资博弈.在我国现行的地方政府政绩考核指标体系下,地方政府官员的经济人行为导致了地方政府的有限理性,进而导致其引资博弈动机与行为的扭曲,以外资优惠政策为主导的引资博弈策略往往造成地区社会福利的净损失.基于对有限理性地方政府目标函教的创新与分析,本文采用博弈模型详细演绎了有限理性地方政府引资博弈的动机、行为与后果,从中得出问题的症结及改进思路.     

“Constitutionalizing” the corporation

To become effective instruments in the attainment of a sustainable society, corporations should have their constitutional status settled. Thus far, mainly by Supreme Court decisions, corporations have an uncertain status. They are “persons” under the Constitution and have certain rights; but unlike natural persons, they do not have concomitant constitutional duties. Corporations should be viewed as “private” governments exercising substantial power in society. They are, however, considered to be associations of individuals rather than divisions of society. The need is to legitimate their governing power by “constitutionalizing” them. That can be done by corporations accepting, or having imposed upon them, two principal constitutional duties. First, means should be developed whereby corporate officers routinely take the general good into account. That duty could be implemented by making “social impact statements,” analogous to but broader than the familiar environmental impact statements, before making important corporate decisions. Secondly, as “sociological communities,” corporate officers wield considerable power over members of those communities. A bill of rights similar to the Constitution's Bill of Rights is recommended so as to make corporate power that is necessary for achievement of societal goals as tolerable and decent as possible. Acceptance of those duties would make corporations parts of, not separate from, the greater corporation called society. They would be private, profit-making entities with a definite public function. Preferably, the duties should be voluntarily accepted. Congress, however, has undoubted constitutional power to impose both, should it so desire.     

宪法学的知识界碑——政治学者和宪法学者关于制宪权的对话

制宪权与基础规范是宪法学知识疆域的同一界碑的两面,遮蔽制宪权的那一面,宪法的效力便寄托在基础规范这个纯粹的理智虚拟之上。引进制宪权概念,可以直接论证《共同纲领》作为新中国宪法的正当性,诠释新中国的建国时间。借助于“制宪权——宪定权”的二分法,宪法学可以形成一个清晰的中国政治结构图,辨识中国的立宪时刻,阐释“改革宪法”的内在悖论,同时可以嘹望宪法实施的远景,择选合适的宪法守护者。     

Decentralized Governance,Constitution Formation,and Redistribution

What determines the relative strength of central and regional governments? Why do centers engage in more or less geographically based economic redistribution? And why do some centers redistribute from urban to rural areas while others do the opposite? This research answers these questions with reference to decentralized politics at key constitutional moments. Much contemporary research underscores the importance of the intergovernmental balance of power – be it in taxing authority or decision making autonomy – on economic outcomes. Many features of that balance are rooted in bargains struck at the time of constitution writing. Here, I suggest that the key ingredients in such bargains are the number of conflicting geographically salient factor endowments, the distribution of inter-regional inequality, and the degree of intra-state inequality within rural and urban regions. The greater the level of factoral conflict, the more elites who engage in constitutional negotiations are likely to constrain the central government by providing for substantial regional veto authority. Higher levels of inter-regional inequality heighten demands for inter-regional redistribution. Given some level of regional demand for central redistribution, whether its net effect is in favor of urban or rural regions will depend on the coalitional implications of inequality within regions. I examine the argument in light of the U.S., Argentine, and Indian processes of constitution formation.     

转移支付对中国省级政府财政努力的影响

An ideal scheme of intergovernmental transfer should be determined by equalization and efficiency with taking account of fiscal effort of local governments. In this regard, this paper provides a comprehensive review of Chinese transfer system since the decentralized taxation system (DTS) starting from 1994. To begin with, we make numerical analysis on equalization in economic and fiscal aspects since the 1994 DTS reform. A Panel Data model is then developed to analyze correlations between each of three types of transfer and fiscal effort of provincial governments based on Chinese experience during 1994–2006. The authors further research respective situation of eastern, middle and western parts of China and finally draw a conclusion through the above analysis that the current fiscal transfer system does not tangibly contribute towards improving fiscal effort devoted by local governments. In addition to that, it even has a somewhat counter-equalizing effect.      

中国宪法中的不成文宪法——理解中国宪法的新视角

本文从中国宪法文本与宪政实践之间的背离问题入手,提出了从不成文宪法的角度来理解中国宪政秩序的新思路。基于对英美宪法学说与宪政实践的分析,作者区分了古典的政制与现代的宪法律、政治宪法与法院宪法,进而主张任何国家的宪政运作实际上都依赖不成文宪法,从而奠定不成文宪法的法理学基础。在此基础上,文章选择中国宪法中关于国家建构中四个关键性问题,着重探讨中国不成文宪法的四个主要渊源,即成文宪章、宪法惯例、宪法学说及宪法性法律,并呼吁宪法学应当从中国现实的宪政生活中提炼具有普遍意义的宪政原理和制度。     

Vibert's vision: Constitutional theory in search of a constitution

Frank Vibert's book, Europe: A Constitution for the Millennium, draws on constitutional economics to describe how a European constitution should be developed to govern a European political union. Vibert's theoretical constitutional framework is solid, but his analysis has two shortcomings. First, he discusses constitutional theory but never presents any specific constitutional provisions that would be based on that theory. This makes the feasibility of drawing up an acceptable constitution appear more straightforward than it actually is. Second, he assumes that Europe will eventually be politically unified in much the same manner as the United States, and does not consider alternatives. Rather than having a single European government, as Vibert suggests, a better alternative would be to have European nations united through a variety of treaties, agreements, and multinational organizations.     

美国政府对联邦土地及其附属资源的管理模式

美国宪法确立了联邦政府对其拥有的土地及附属自然资源的专属管理权,但这种专属管理权的行使不可能排斥州和地方政府的参与。联邦政府与州政府以及地方政府在对联邦土地及附属自然资源的管理上,实际实行的是联邦政府主导的合作型联邦制。在保证联邦政府对联邦土地管理最终决定权的前提下,联邦政府通过制定法律和签订协议的形式与州和地方政府分享权力,以便对联邦土地及附属自然资源进行富有成效的管理。     

National Judicial Power and the Dormant Commerce Clause

We develop a game in which a court monitors states as they regulatetrade among themselves. Contrary to commentators who see SupremeCourt oversight of state burdens on interstate commerce as theproduct of a powerfully ascendant court, we argue that the "dormantCommerce Clause" (DCC) originates as the strategic product ofan institutionally weak court. We provide three lines of argument.First, we refute the notion that merely observing the courtruling against state governments and those governments complyingwith its ruling is evidence of judicial power. Second, we showthat the equilibria of our "weak court" model directly impliesthe doctrinal contours of the DCC while the ascendancy hypothesisdoes not. Finally, we provide evidence that the court announceda weaker version of the DCC doctrine than sincerely preferredby pivotal justices on the court. Our arguments invite a revisedunderstanding of the role of the court in the development ofthe American political system.     

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.     

The tax-spending nexus: Evidence from a panel of US state-local governments

We re-examine the tax-spending nexus using a panel of 50 US state-local government units between 1963 and 1997. We find that, unlike tax revenues, expenditures adjust to revert back to a long-term equilibrium relationship. The evidence on the short-term dynamics is also consistent with the tax-and-spend hypothesis. One implication of this finding is that the size of the government at the state-local level is not determined by expenditure demand, but rather by resource supply. This is consistent with the fact that many US state and local governments operate under constitutional or legislative limitations that seek to constrain deficits.     

We start from here

As James Buchanan often asserted, in constitutional design “we start from here” which is to say we design a constitution to fit the institutions, social practices and so forth that we already have. Comparison of the complicated case of the US constitution and the failed attempt at constitutionalism in contemporary Egypt suggest that many societies are not yet ready for serious constitutional design. The English civil wars were about religion; the US constitution ignores religion and thereby avoids the grim conflict of church and state.     

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.     

Do large cabinets favor large governments? Evidence on the fiscal commons problem for Swiss Cantons

The fiscal commons problem is one of the most prominent explanations of excessive spending in political economics. For a panel of the 26 Swiss cantons over the 1980–1998 periods, this paper explores the role of fragmented governments on fiscal policy outcomes. We distinguish between two variants of fragmented governments: cabinet size and coalition size. In addition, we analyze whether constitutional rules for executive and legislature as well as formal fiscal restraints shape the size of government and how different rules interact with fragmentation. The results indicate that the number of ministers in the cabinet is positively associated with the size of government. While fiscal referendums effectively restrict the size of government, there is also evidence that fiscal referendums relax the fiscal commons problem to some extent.     

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.