Money and the rule of law

Contemporary monetary systems permit those in positions of authority to exercise discretionary power in the pursuit of monetary policy objectives. We argue there are strong prima facie reasons why this is normatively problematic. Engaging the literature on the rule of law, we argue that a general and nondiscriminatory rule ought to apply to monetary institutions for the same reasons such a rule ought to apply to other important institutions. We recognize that this prima facie case may be overcome by sufficiently strong consequentialist concerns, but show that these concerns are ungrounded: discretionary monetary authorities, both in theory and practice, perform poorly. We thus affirm the importance of the rule of law for monetary policy as a requisite for both non-arbitrary governance and macroeconomic stability.     

Trade,trust and the rule of law

Well-functioning institutions, both formal (i.e. rule of law) and informal (i.e. trust), facilitate economic exchange. To investigate the nature of the relationship between formal and informal institutions, we analyze bilateral trade patterns in a sample of 16 European countries between 1996–2009. Our results show that trust and rule of law are substitutes, as the positive effect of trust on trade is conditional on the quality of the rule of law. When the rule of law of the importing country increases relative to that of the exporter, the effect of trust on trade decreases. The decline in the effect of trust on trade is less for importers than for exporters, a result that can be attributed to the risk of non-payment that exporters run.     

Money and the rule of law in ecuador

The rule of law is defined and its implications in the monetary sphere are elaborated. When national monetary arrangements fail to comport with the rule of law, “dollarization” is desirable. That policy provides for more stable money and expectations about its future value. The salutary effects of Ecuador's “dollarization” program of 2000 are reviewed. In addition, a manifesto for economic reform in Ecuador is presented. Its elements are: financial integration, fiscal transparency and control, tax simplification and reform, supermajority voting, deregulation, and privatization.     

Rackets, regulation, and the rule of law

Governments that levy predatory regulation and provide few weaklegal institutions draw businesses into the unofficial economyand compel them to hire private protection organizations. Basedon a survey of shopkeepers in three cities in Russia, we findthat retail shops face very high levels of predatory regulationand have frequent contacts with private protection rackets.In addition, we show that higher levels of regulation are associatedwith weaker legal institutions and a higher probability of contactwith a private protection organization. We also find that shopkeepersview private protection organizations primarily as a substitutefor state-provided police protection and state-provided courts.These results emphasize the importance of public sector reformas a component of economic transition.     

Country size and the rule of law: Resuscitating Montesquieu

In this paper, we demonstrate that there is a robust negative relationship between the size of country territory and a measure of the rule of law for a large cross-section of countries. We outline a framework featuring two main reasons for this regularity; firstly that institutional quality often has the character of a local public good that is imperfectly spread across space from the core of the country to the hinterland, and secondly that a large territory usually is accompanied by valuable rents and a lack of openness that both tend to distort property rights institutions. Our empirical analysis further shows some evidence that whether the capital is centrally or peripherally located within the country matters for the average level of rule of law.     

Constitutional design for a rent-seeking society: Voting rule choice

If rent-seeking costs are considered in addition to, and separate from, external costs and decision costs in Buchanan and Tullock's economic theory of constitutions, total interdependence costs may have multiple local minima close to the decision-making extremes. As a result, the global minimum, which gives the optimal decision rule, may be much closer to “unanimity rule” or “individual rule” than to “simple majority rule”. Further, the comparison of the minimum total interdependence costs for the public sector with those for the private sector would only justify a smaller scope and size for the public sector than would be the case if rent-seeking costs were ignored. Finally, systematic variation in rent-seeking cost could account for dramatic regime shifts between dictatorship and democracy.     

Foreign direct investment under a weak rule of law

We have developed a self‐enforcing contract model to show that better economic fundamentals can help an area or a region under a weak rule of law – but with order – to attract foreign direct investments (FDIs), whereas lowering taxes does not necessarily help. Using a cross‐region Chinese dataset, we find evidence consistent with our theoretical analysis. Regional variations in tax rates and the perceived quality of formal contracting institutions are not correlated with regional FDI inflows, but leadership characteristics are. Most conventional economic factors have the predicted effects on FDIs. The finding that FDI is lower in locations where domestic private firms have better access to finance and where the air quality is poor is also new to the literature.     

Islamic constitutionalism and rule of law: a constitutional economics perspective

This study investigates the relationship between Islamic constitutionalism and rule of law. Al Azhar, one of the most respected Sunni religious institutions in the world, developed a model of an Islamic constitution. This study uses Al-Azhar’s constitution as a model of Islamic constitutionalism and examines its stance in regard to the rule of law. We find the Al-Azhar’s constitution to be incompatible with essential concepts of rule of law. For example, the powers vested in the head of the Islamic state are enormous, making the executive branch of government far superior to the legislative and judicial branches. Women and non-Muslims are explicitly discriminated against throughout the constitution. Moreover, laws stemming from this constitution are not stable since many differences exist among schools of Islamic jurisprudence (fiqh). Consequently, we show that state-of-the-art Islamic constitutionalism lacks essential components needed in any constitution based on rule of law.     

法治背景下网络反腐的价值与前景探究

随着互联网的普及与发展,网络已成为加强党风廉政建设和反腐败斗争的重要阵地。网络反腐在给民众带来希望和信心的同时,也产生了一些新的问题。基于此,就存在的问题提出完善网络反腐的对策,以期提高网络反腐的法治化水平。     

新常态下推进依法治校的对策研究

依法治校是贯彻落实十八届四中全会精神,推进学校治理体系和治理能力现代化的需要,具有十分重要的意义。在新常态下推进依法治校可概括为：牢固树立推进依法治校理念,健全完善科学民主决策体制,健全完善学校各项规章制度,推进校务和党务公开,推进广大党员干部师生树立法制意识,依法健全校内纠纷解决机制。     

Entry regulation and entrepreneurship: a natural experiment in German craftsmanship

This paper uses the 2004 amendment to the German Trade and Crafts Code as a natural experiment for assessing the causal effects of this reform on the probabilities of being self-employed and of transition into and out of self-employment. This is achieved by using repeated cross-sections (2002–2009) of German microcensus data. I apply the difference-in-differences technique for three groups of craftsmen which were subject to different intensities of treatment. The results show that the complete exemption from the educational entry requirement has fostered self-employment significantly by substantially increasing the entry probabilities, while exit rates have remained unaffected. I find similar, though weaker relative effects for the treatment groups that were subject to a reduction of entry costs or a partial exemption from the entry requirements. Moreover, I consider effect heterogeneity within each of the treatment groups with respect to gender and vocational training, and show that the deregulation of entry requirements has been most effective for untrained workers.     

中华老字号非遗技艺基本特征

中华老字号非遗技艺具有重要的历史文化价值、科学价值和市场价值,对于老字号非遗的认识应该运用历时性与共时性的方法,重视其自然和谐与实用理性的基本特征。老字号非遗技艺的制作理念反映出不违物性、崇尚自然的特点,老字号非遗技艺制作过程中具有自然选材、环境友好等原则。     

Constitutional democracy and the theory of agency

A unanimously adopted democratic constitution is a contract between the people as principal and the government as agent. However, none of the incentive devices employed in private principal-agent contracting assure enforcement of a constitution. Under majority voting, candidates for the job of agent cannot win the job without promising tobreak the contract, and the agent cannot be re-elected unless he keeps that promise. We thank Joseph Haslag for his comments and Beverly Young for her valuable assistance.     

Predicting FDI inflows: Exploring a nonlinear relationship between peace years,oil wealth,and the rule of law

Despite previous studies investigating the impacts of various factors such as peace years, natural resources, and the rule of law on foreign direct investment (FDI), empirical findings remain inconclusive. Therefore, this study investigates the interplay between these factors in shaping host country conditions that facilitate FDI inflows. Using generalized additive models, we examine the simultaneous effects of peace years, oil wealth, and the rule of law on FDI inflows in a sample of non-OECD countries from 1970 to 2009. Our results reveal that established peace is a critical factor in attracting FDI inflows for both oil-exporting and non-oil-exporting countries. However, the effects of the rule of law vary depending on oil wealth. Oil-exporting countries receive more FDI inflows when they have a weak rather than a strong rule of law, while non-oil-exporting countries tend to receive more foreign investments when they have a moderately strong rule of law. We argue that countries with oil wealth combined with a moderately weak rule of law provide an environment that is conducive to multinational corporations (MNCs) in extractive industries seeking monopoly rents. Conversely, countries without oil wealth should create stable yet efficient environments that protect property rights and promote labor market flexibility to appeal to non-resource-seeking MNCs.     

Demand for litigation in the absence of traditions of rule of law: an example of Ottoman and Habsburg legacies in Romania

The paper investigates the impact of historical legacies of the Habsburg and Ottoman Empires on demand for litigation in contemporary Romania in criminal cases. It finds that nowadays a key difference between these two historical zones is that in the Habsburg counties demand for litigation increases if the income goes up; in the Ottoman counties, however, the demand remains constant. Furthermore, the demand for litigation in poor counties is smaller in Habsburg than in Ottoman counties. We provide several explanations to this phenomenon and compare it to the anecdotal evidence of culture of judicial appeals in other countries.     

对《中共中央关于全面推进依法治国若干重大问题的决定》的几点思考

党的十八届四中全会通过的《中共中央关于全面推进依法治国若干重大问题的决定》就依法治国提出许多新的思想观点,从实现中华民族伟大复兴中国梦的高度阐述依法治国的重大意义,把习近平总书记的系列重要讲话精神首次作为依法治国的指导思想,从依据宪法法律治国理政和依据党内法规管党治党两方面阐明了党依法执政的新内涵,提出了"人民是依法治国的主体和力量源泉"的新论点,全面阐述了依法治国的重大任务。     

Manipulation and the Pareto rule

This paper examines rules that map preference profiles into choice sets. There are no agendas other than the entire set of alternatives. A rule is said to be “manipulable” if there is a person i, and a preference profile, such that i prefers the choice set obtained when he is dishonest to the one obtained when he is honest. It is “nonmanipulable” if this can never happen. The paper indicates how preferences over choice sets might be sensibly derived from preferences over alternatives, and discusses seven different notions of manipulability associated with seven different assumptions about preferences over sets of alternatives. The paper has two sections of results. In the first I show that the Pareto rule, that is, the rule that maps preference profiles into corresponding sets of Pareto optima, is nonmanipulable in four of the seven senses of manipulability, and manipulable in three of them. In the second section, I examine this conjecture: If an arbitrary rule is nonmanipulable and nonimposed, and if indifference is disallowed, then every choice set must be contained in the set of Pareto optima. The conjecture is true under the strongest definition of nonmanipulability.     

The golden rule and the Ramsey rule at a second best solution

This paper shows that even at the second best solution the golden rule and the Ramsey rule hold if all the effective non-lump sum taxes are available in the context of an overlapping generations model.     

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.