Rent Seeking with Efforts and Bids

We introduce bids in a rent-seeking contest. Players compete for a prize. Apart from exerting lobbying efforts, they also submit a bid which is payable only if they win the prize. We show that our model has a unique Nash equilibrium in pure strategies, in which each active player submits the same bid, while the sum of all efforts equals that bid. In equilibrium there is underdissipation of rent.     

Political Competition, Rent Seeking and the Choice of Environmental Policy Instruments

This paper investigates the impact of political lobbying on the choice of environmental policy instruments. It is argued that the prevalence of pollution emission standards over more efficient policy instruments may result from rent seeking behaviour. The model further predicts that when an emission standard is used to control pollution, rival political parties have an incentive to set the same standard. There is therefore a convergence of policies. Moreover, it is shown that emission taxes are more likely to be supported and proposed by political parties which represent environmental interest groups. This feature appears to accord with the observed support for environmental taxes by Green parties in Europe, Australia, New Zealand and elsewhere.     

公司多元化折价:寻租与投资偏差

相对于业务集中的企业来说,多元化公司往往出现市场价值贬损,尽管造成这一现象的原因多种多样,但部门经理寻租引致公司经理配置资源出现偏差,则是产生公司多元化折价的重要根源之一.文章基于这一思想,通过建立模型进行了深入分析,得出多元化公司往往出现折价并给出了影响折价的一些重要因素.     

Political Learning: The Neglected Precondition of Constitutional Reform

This paper analyses the claim of constitutional economics that liberal economic policy requires far-reaching constitutional reform. The paper starts with a restatement of this claim and reinforces the rationale of the currently most influential variants of constitutional economics as represented by contractarian constitutional economics (Brennan, Buchanan), on the one hand, and Hayek s evolutionary theory, on the other. However, these constitutional proposals have shortcomings because the institutional preconditions of constitutional reform are not sufficiently reflected. Instead, I argue that, in face of economic crisis, a revision of in-period politics requires no more collective rationality than constitutional reform does. As a consequence, the introduction of new constitutional rules depends on political learning. The article concludes that constitutional rules in the sense of CPE can stabilise political learning but they cannot replace it.     

The Process of Government Centralization: A Constitutional View

Government centralization is not a law of nature. It can be explained on the one hand by the endeavor of locally elected representatives of national assemblies to form tax and expenditure cartels, on the other hand by the constitutional power of the federal government to take over state tax legislation and to act as a cartel enforcer. A case study provides empirical evidence and moreover shows that such cartels generate a higher tax level and perform badly in interregional equalization of per capita income. The relevance of constitutional power for explaining centralization seems to be confirmed in various countries.     

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.     

The Uncertainty of Academic Rent and Income Inequality: The OECD Panel Evidence

The article presents an alternative view on the education—income inequality relationship, which calls into question the neoclassical claim that education increases labor productivity and hence contributes to a higher output, wage and consequently more even income distribution. In the context of public policies, education needs to be seen not only as a factor of income mobility, but also as a “positional good,” which benefits graduates at the expense of non-graduates. Education generates “academic rent,” by which we mean uneven remuneration of workers based on academic signs of distinctions that do not necessarily reflect differences in productivity. Using the robust panel model on a sample of OECD (Organization of Economic Co-operation and Development) countries from 1980 to 2015, we show that investments in human capital lead to lower inequality, but overinvestments tends to increase income inequality, which may be related to academic rent. In discussing this result, we consider that uncertainty of academic rent under the condition of a rapid transformation of the workplace caused by the fourth industrial revolution.     

Rent Seeking Behavior in Transition Countries: The Case of Romania

This paper points out, in the changing institutional setting of transition in Romania, Some relevant factors influencing economic actors to behave in a way that pushes them to devote resources to unproductive goals, rather than to embark on activities that add economic and social value. The theoretical insights offered in the literature of rent seeking are applied to the issues of transition. A mathematical model of a rent seeking economy is presented, analyzing the influence of interest groups activity on the overall income of the economy. Some examples of rent seeking behavior that severely hamper the economic efficiency are illustrated for the case of Romania. The conclusion is that, in appreciating the progress in transition, the reduction in rent seeking is an important factor to be taken into consideration.     

Regulatory Disequilibrium and Inefficiency: The Case of Interstate Trucking

Economic regulation is characterized as (1) an effort by special interests to influence the allocation of property rights, in (2) a continuous path-dependent spontaneous evolution (as apposed to a static equilibrium), driven by (3) market, political, and bureaucratic entrepreneurship in an ongoing discovery process. The implications of the model are illustrated by an examination of the evolution of regulation in interstate trucking. The model is also used to explain that the Chicago School's political-regulatory efficiency conclusions are incorrect, and that the inefficiencies arising from rent seeking are even greater than the Public Choice approach implies.     

The Interdependence Between Private and Constitutional Law: a Comment on the Grady & McGuire' Paper

After having summarized the paper by Grady & McGuire, one of their central conjectures, namely that inequality is necessary and sufficient for the emergence of efficient private law is discussed. It is argued that due to inequality, rulers have incentives to discriminate between subjects. Thus, their interests might very well diverge from those of many subjects with regard to private law. It is further argued that political transaction costs and path dependence should be taken explicitly into account when explaining the development of private law. The present author concludes that the approach taken by Grady & McGuire is compatible with that of public choice, although they aim to criticize the public choice approach.     

The Costs of Implementing the Majority Principle: The Golden Voting Rule

In a context of constitutional choice of a voting rule, this paper presents an economic analysis of scoring rules that identifies the golden voting rule under the impartial culture assumption. This golden rule depends on the weights β and (1−β) assigned to two types of costs: the cost of majority decisiveness (‘tyranny’) and the cost of the ‘erosion’ in the majority principle. Our first main result establishes that in voting contexts where the number of voters n is typically considerably larger than the number of candidates k, the golden voting rule is the inverse plurality rule for almost any positive β. Irrespective of n and k, the golden voting rule is the inverse plurality rule if β ≥ 1/2 .. This hitherto almost unnoticed rule outperforms any other scoring rule in eliminating majority decisiveness. The golden voting rule is, however, the plurality rule, the most widely used voting rule that does not allow even the slightest ‘erosion’ in the majority principle, when β=0. Our second main result establishes that for sufficiently “small size” voting bodies, the set of potential golden rules consists at most of just three rules: the plurality rule, the Borda rule and the inverse plurality rule. On the one hand, this finding provides a new rationalization to the central role the former two rules play in practice and in the voting theory literature. On the other hand, it provides further support to the inverse plurality rule; not only that it is the golden rule in voting contexts, it also belongs, together with the plurality rule and the Borda method of counts, to the “exclusive” set of potential golden voting rules in small committees. We are indebted to Jim Buchanan, Amichai Glazer, Noa Nitzan, Ken Shepsle, and an anonymous referee for their useful comments.     

Expressive and Instrumental Voting: The Scylla and Charybdis of Constitutional Political Economy

Brennan and Hamlin [(2002) Constitutional Political Economy 13(4): 299–311] noted that expressive voting still holds at the constitutional phase. The argument, when taken to its necessary conclusion, proves quite problematic for Constitutional Political Economy. Veil mechanisms following Buchanan induce expressive voting at the constitutional phase, removing the normative benefits ascribed to the hypothetical unanimity principle. If the constitution is authored by a small group and the veil is thereby removed, instrumental considerations come to bear and the authors of the constitution establish themselves as Oligarch.     

The Powers of The Central Governments and the Problems of Enlarging and Deepening the European Union: An Essay of Constitutional Political Economy

In this paper we present an adaptation of Buchanan and Tullock’s model in order to apply it to the constitutional choices regarding the assigning of powers to a supranational authority. The outcome of the economic-political model developed in this paper demonstrates that there are constraints in the supply of integration, suggesting that the enlargement and deepening of the European Union will have to be based on federalist conceptions. The authors should like to thanks seminar participants at European Public Choice conference (Belgirate 2002) and ECSA-C conference (Toronto 2002) where earlier versions of the paper have benefited from constructive suggestions. The authors assume the sole responsibility for any errors remaining in this version.     

Optimal Design of Pension Rule with Flexible Retirement: The Two-Type Case

We study a model where the government offers two contracts: either low retirement age, low lifetime benefit or high retirement age, high lifetime benefit. Each worker privately knows whether he has a low or high life expectancy and chooses accordingly. The so-called ``actuarially fair' system – calculated at an average life expectancy – is shown to be not fair: the expectedly shorter-lived subsidize the expectedly longer-lived. Considering optimal design, second-best contracts are separating. Under neutrality, the shorter-lived retire too early with too low a benefit. Under redistribution, the shorter-lived work long enough and receive a high enough benefit to enjoy a higher lifetime utility than under neutrality, although they subsidize the longer-lived.     

制度-垄断地租与中国地方政府竞争:一个马克思主义分析框架

竞争性地方政府作为改革以来形成的重要制度形式,在相当程度上决定了中国社会主义市场经济体制的特点。本文不仅承续了既有文献中将地方政府的经济动机归于租金,并将土地财政视为地方政府利用租金开展战略投资的观点,而且试图在一个马克思主义框架内进一步发展这一观点。为此我们对租金的生产性利用和国家的经济作用的关系做了初步探讨,并将大卫·哈维的制度-垄断地租理论运用于分析中国地方政府围绕营建环境的投资活动。本文的基本结论是,中国地方政府在以土地财政为核心的战略投资中,充当了租金的生产性分配者和使用者的角色,并因之嵌入了原本由企业之间的竞争所带来的相对剩余价值生产过程,形成了中国经济特有的相对剩余价值生产双重结构,从而在相当长的时间内造就了世所罕见的高投资率,推动了中国经济的持续快速增长。     

城市化包容性发展的路径设计及战略选择研究

城市化的包容性发展是众多城市发展的追求和目标取向。它顺应了城市经济良性运行和城市化经济协调运转的基本需求,必将成为中国城市化发展的战略选择。就中国的城市化包容性发展而言,可从基本内核、基本要义、基本依托和基本保障等层面入手,切实转换思维模式,提升城市化品质、走新型城市化道路、建立成效分享制度与再分配政策及优化外部环境,此可堪称中国城市化包容性发展的战略选择。     

The allocation of entrepreneurial efforts in a rent-seeking society: Evidence from China

This paper considers four types of entrepreneurial efforts: productive activities, aggressive rent seeking, defense against rent extraction, and leisure. It examines how entrepreneurs allocate efforts when facing dual-dealing relationships with politicians in a rent-seeking society: entrepreneurs not only pursue additional benefits through rent seeking, but also try to avoid extortions by politicians. Using unique city-level and firm-level data across China, we demonstrate that Chinese entrepreneurs survive in a twisted world: ordinary entrepreneurs would desire better institutional environment, but if institutional improvement is not available, they would prefer political connections which are often preoccupied by special interest groups and/or large-sized firms.     

国有产权转让中的机制设计--基于企业职工的合约选择

在国有产权转让过程中,关键是要克服国有产权本身所具有的不利于进行市场交易的特性,使其交易更符合市场原则。市场本身就是由一个个的合约所构成,是否选择签约及合约的方式是由每个参与者自己作出的。因此,国有产权转让的机制设计就是要尽量使相关的利益主体有权作出对自己有利的合约选择,并对自己的行为负责。     

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.     

跨国公司海外子公司战略选择:一种综合的分析框架

已有的海外子公司战略选择的差异主要源于三个视角的分析，即环境决定主义、母公司指派、子公司自身选择。本文以东道国环境有利性、子公司与母公司全球战略的匹配度、子公司的特定优势为向量。提出了影响海外子公司战略选择的三维模型．并对三维模型的八种组合进行了简要分析。这种综合的分析框架对于跨国公司海外子公司战略选择的研究，承接了已有的研究成果，提出了新的研究方法，拓展了新的研究空间。