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Constitutional economics:Constitutional economics examines the relationship between economic systems and their underlying political and legal frameworks. It focusses on the (economic) effects of alternative constitutional rules and the emergence and modification of constitutional rules. See also Constitution, Laws, Law, Economy.
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Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments.

 
Author Concept Summary/Quotes Sources

Torsten Persson on Constitutional Economics - Dictionary of Arguments

Parisi I 205
Constitutional Economics/Tabellini/Persson/Voigt: Persson and Tabellini (2003)(1) is a major contribution to Positive Constitutional Economics (PCE). They analyze the economic effects of two constitutional institutions, namely electoral system and form of government.
>Electoral Rules/Persson/Tabellini
.
Parisi I 206
District size: Beyond electoral rules, Persson and Tabellini (2003)(1) also deal with potential effects of both district size and ballot structure. Suppose (…) that single-member districts are combined with plurality rule. In this situation, a party needs only 25 % of the national vote to win the elections (50% of half of the districts: Buchanan and Tullock, 1962)(2).
Contrast this with a single national district that is combined with PR. Here, a party needs 50% of the national vote to win. Persson and Tabellini (2000(3), ch. 9) argue that this gives parties under PR a strong incentive to offer general public goods, whereas parties under plurality rule have an incentive to focus on the swing states and promise policies that are specifically targeted at the constituents' preferences.
Ballot structure: Regarding the ballot structure, MR systems frequently rely on individual candidates, whereas proportional systems often rely on party lists. Party lists can be interpreted as a common pool, which means that individual candidates can be expected to invest less in their campaigns under PR than under MR. Persson and Tabellini (2000(3), ch. 9) argue that corruption and political rents should be higher the lower the ratio between individually elected legislators and legislators delegated by their parties.
Parisi I 207
Costs/economic variables: [Persson and Tabellini] (…) found that electoral systems are significantly
correlated with a number of economic variables.
(1) In majoritarian systems, central government expenditures are some 3% of GDP lower than under PR.
(2) Expenditures for social services ("the welfare state") are some 2-3 % lower in majoritarian systems.
(3) The budget deficit in majoritarian systems is some 1-2% below that of systems with PR.
(4) A higher proportion of individually elected candidates is associated with lower levels of (perceived) corruption.
(5) Countries with smaller electoral districts tend to have more corruption.
(6) A larger proportion of individually elected candidates is correlated with higher output per
worker.
(7) Countries with smaller electoral districts tend to have lower output per worker.
Blume, Müller, Voigt and Wolf (2009)(4) replicate and extend PT's analysis, finding that with regard to various dependent variables, district magnitude and the proportion of individually elected candidates is more significant - both substantially and statistically - than the electoral rule itself.
Bias/VsTabellini/VsPersson: Iversen and Soskice (2006)(5) notice that three out of four governments under majoritarian systems were center-right between 1945 and 1998, whereas three out of four governments were center-left under PR. In other words, the results
Parisi I 208
from Persson and Tabellini might suffer from omitted variable bias: it could be that both the electoral system as well as government expenditure are determined by the prevailing ideological preferences of the population.
>Governmental structures/Constitutional economics, >Governmental structures/Persson/Tabellini.

1. Persson, T., G. Roland, and G. Tabellini (1997). "Separation of Powers and Political Accountability." Quarterly Journal of Economics 1 12: 310-327.
2. Buchanan, J. M. and G. Tullock (1962). The Calculus of Consent - Logical Foundations of Constitutional Democracy. Ann Arbor, MI: University of Michigan Press.
3. Persson, T., G. Roland, and G. Tabellini (2000). "Comparative Politics and Public Finance."
Journal of Political Economy 108(6): 1121—1161.
4. Blume, L., J. Müller, S. Voigt, and C. Wolf (2009a). "The Economic Effects of Constitutions:
Replicating - and Extending - Persson and Tabellini." Public Choice 139: 197—225.
5. Iversen, T. and D. Soskice (2006). "Electoral Institutions and the Politics of Coalitions: Why
Some Democracies Redistribute More Than Others." American Political Science Review 100: 165-181.

Voigt, Stefan, “Constitutional Economics and the Law”. In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University

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Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments
The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.

EconPerss I
Torsten Persson
Guido Tabellini
The size and scope of government: Comparative politics with rational politicians 1999

Parisi I
Francesco Parisi (Ed)
The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017


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