Abstract
Will a society’s political agents provide good governance? An answer must be sought first and foremost at the constitutional level. While Austrians have made important contributions to constitutional political economy (CPE), they have often avoided interesting and important questions regarding today’s constitutional realities. This is particularly true when it comes to de jure constitutional design. Why do de jure constitutions matter? Can they be designed such that they are robust? When they are not robust, does constitutional drift lead to a better or worse governance environment? In discussing these questions, I attempt to point Austrian scholars towards some potentially fruitful CPE research avenues.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
In addition to providing the rules of the game for political agents, constitutions can also give form to the institutions via which governance is provided and elaborate on the ends towards which governance should be aimed. This broader characterization of a constitution is consistent with the one offered by Ginsburg (2010, p. 70): “First of all, they serve to constrain the government[. ...] Second, constitutions express fundamental values of the polity. [...] Third, constitutions elaborate on the institutions of government”; also see Elkins et al. (2009, pp. 38–39).
While these three separate functions are analytically useful, in practice they are not clearly delineated. For example, the form of governance institutions determines the relevant division or powers and checks and balances; it therefore determines, in part, the constraints on political agents.
I am more comfortable with the previously used “scholars steeped in the traditions of Austrian economics”. Many scholars understandably prefer not to be labeled and pigeonholed. To avoid verbiage, though, I will simply refer to “Austrians” moving forward, with apologies.
Of course, Austrian scholars may channel their work on comparative constitutional design towards other journals and into books. Perusing journals such as Public Choice and Constitutional Political Economy does not lead me to qualify my basic claim. One might also complain that I do not clearly define who I would count as “steeped in the traditions of Austrian economics”. This is a fair complaint and I am happy to, regarding my basic claim, ultimately plead take it or leave it! I also note that by “comparative constitutional design in the contemporary era” I refer to constitutions at the nation-state level. Thus, for example, I am discounting (only in the present context!) Skarbek’s (2010, 2014) excellent work on the constitutions of prison gangs, example of which include codifications.
Expanding this point, CPE directs attention to “the design of effective rules to prevent the abuse of government power, and to facilitate government production that benefits the general population rather than concentrated special interests” (Holcombe 2018, p. 1).
Though see Wagner’s (2018) arguments that Tullock’s theorizing was more consistently rooted in process, evolution, and emergence that Buchanan’s: “Buchanan’s mental framework was grounded in concord and teleology; Tullock’s was grounded in conflict and evolution” (p. 1999).
Ginsburg (2013, pp. 184–185) also defends “constitutions as contract” by noting that in many cases “bargaining is an accurate description of the elite-level negotiations that produce the [constitutional] text [...]”. But the purpose of constitutional constraints is to prevent political elites from acting in their own interests and at the expense of the governed (Brennan and Buchanan 1985; Buchanan and Congleton 2003 [1998]; Holcombe 2018, pp. 4–5).
One might argue that the enforceability of the constitution would be part of the deliberation and design from “behind the veil of ignorance”. However, I am unaware of any thought experiment in the Buchanan and Tullock (1962) tradition that seriously deals with this.
I say generally in acknowledgement of Ginsburg’s (2013, pp. 186–188) argument that “in contemporary constitution-making, international actors may provide a degree of external enforcement[. ... And] that international involvement is becoming more the norm than the exception” (p. 186).
Relatedly, Barnett (2003) argues that judges should interpret the US Constitution according to its “original meaning” to be governed public, as opposed to the intent of the drafters. The “original meaning” is what individuals coordinated around; not whatever the drafters happened to have in mind.
Young (2019) makes the analogous argument regarding the case of medieval monarch’s in Europe convoking assemblies of the leading men of their realms. Monarchs’ commitments became more credible because they (perhaps unwittingly) promoted the sovereignty of those leading men as a collective. Salter and Young (2018b) argue that structure of those assemblies (three chambers with separate representation of nobles, clergy, and burghers versus two chambers with mixed representation) was important determinant of the extent to which monarchs’ absolutist tendencies were resisted. Relatedly, Bologna Pavlik and Young (2019a, b) present evidence that populations rooted in stronger medieval assembly traditions are associated with stronger property rights, rule of law, and state capacity today.
Of course, according to this view, effective constitutional design begins with successfully identifying which rules are feasible in the first place. That is no trivial task.
Though the entrenched-vs.-unentrenched and spare-vs.-specific dimensions can be considered separately, they are fundamentally related. More detailed constitutional provisions are more likely to become unsuitable as time passes and circumstances change; thus a greater (more frequent) demand for amendment.
“A constitution is Peter sober while the electorate is Peter drunk” (Holmes 1995, p. 135).
Bjørnskov and Voigt (2014) argue that the length of a constitution may reflect individuals’ level of social trust. When individuals are less trustful of political agents, they may feel he need to provide them with more detailed constraints and instructions. Related to the models of constitutional design discussed above, less (more) trust may be associated with a higher (lower) demand for “ongoing constitutional micromanagement”.
Recent examples include Eicher et al. (2018), who find that constitutional constraints on the executive and the structure of the electoral system are associated social infrastructure, and Minkler and Prakash (2017), who find the strength of constitutional language on economic and social rights is negatively related to poverty rates. Voigt (2011) reviews the empirical literature up to his point of writing; see his table 2 for a summary list of studies and their findings. I am not stating my agreement with the findings of these two specific studies or those overviewed by Voigt. Rather, they are representative of a literature to be engaged.
Emphasis is placed on the “corresponding”. Certainly, the US Constitution has been amended. However, the drift involves changes that do not correspond to de jure amendments.
That suspicion may be unwarranted; I may be projecting my own reaction – at least knee jerk – to such drift.
However, note that Kogelmann and Salter (2019) argue that, to maintain a well-ordered liberal democracy, the judiciary would do best to act as originalists, i.e., “holding that the meaning of the [de jure] constitution is fixed and stable, and interpretive changes are dangerous because they are likely to amount to de facto constitutional revisions, which should instead proceed according to formal amendment procedures[.]” I interpret their argument not as assuming that the de jure benchmark is, considered statically, necessarily better than the constitutional outcome of drift; rather, that constitutional drift forgoes the dynamic benefits of an entrenched constitution (see section 2.1 above).
Salter (2017, p. 580) acknowledges that “patterns [of constitutional drift] cannot be understood without a unified conception of how information problems relate to incentive problems.” He continues: “My theory provides this link, and although it is not sole explanation of political maladies, it is a particularly timely one.” I generally agree with this last statement. However, there is an important qualifier. Salter elaborates on incentives that are “problems” to the extent that they lead to constitutional drift in the direction of governance plagued by greater information problems. His theory certainly does provide, in this sense, and important link between incentive and information problems. However, the theory does not directly address the tradeoff between incentive and information problems that will be embodied in the governance of the initial constitution vis-à-vis the form it drifts to.
That this prior is “evident” is, well, evidenced by the following from Salter (2017, p. 570): “Political dysfunction is the conjunction of the incentive problem and the knowledge problem. I take the former as my point of departure and focus analytical efforts on the latter, showing the nature and importance of political dysfunction in the context of the American republic. Political dysfunction so conceived concerns those continuing James M. Buchanan’s (1975) project: enabling the protective state and the productive state while enfeebling the predatory state.” Salter generally comments favorably on Buchanan’s project, as do I.
See Hall and Lawson (2014) for a review of studies linking economic freedom to desirable economic outcomes.
References
Acemoglu, D. A. (2003). Why not a political Coase theorem? Social conflict, commitment, and politics. Journal of Comparative Economics, 31(4), 620–652.
Aghion, P., & Bolton, P. (2003). Incomplete social contracts. Journal of the European Economic Association, 1(1), 38–67.
Albert, R. (2014a). Constitutional disuse or desuetude: The case of article V. Boston University Law Review, 94(2014), 1029–1081.
Albert, R. (2014b). Constitutional amendment by constitutional desuetude. American Journal of Comparative Law, 62(3), 641–686.
Barnett, R. (2003). Restoring the lost constitution: The presumption of liberty. Princeton: Princeton University Press.
Berggren, N. (2014). The calculus of consent at fifity: Insights for liberalism. Independent Review, 18(3), 373–389.
Bjørnskov, C., & Voigt, S. (2014). Constitutional verbosity and social trust. Public Choice, 161(1), 91–112.
Boettke, P., & Leeson, P. (2004a). An ‘Austrian’ perspective on public choice. In C. K. Rowley & F. Schneider (Eds.), The encyclopedia of public choice. Boston: Springer.
Boettke, P., & Leeson, P. (2004b). Liberalism, socialism, and robust political economy. Journal of Markets and Morality, 7(1), 99–111.
Bologna Pavlik, J., & Young, A. T. (2019a). The legacy of representation in medieval Europe for incomes and institutions today. SSRN Working Paper. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3032584
Bologna Pavlik, J., & Young, A. T. (2019b). Medieval European traditions in representation and state capacity today. SSRN Working Paper. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3251355
Brennan, J. (2016). Against democracy. Princeton: Princeton University Press.
Brennan, G., & Buchanan, J. M. (1985). The reason of rules: Constitutional political economy. Cambridge: Cambridge University Press.
Buchanan, J. M. (1975). The limits of liberty: Between anarchy and leviathan. Chicago: University of Chicago Press.
Buchanan, J. M. (1987). Economics: Between predictive science and moral philosophy. College Station: Texas A&M University Press.
Buchanan, J. M. (1990). The domain of constitutional economics. Constitutional Political Economy, 1(1), 1–18.
Buchanan, J. M., & Congleton, R. D. (2003 [1998]). Politics by principle, not interest: Towards nondiscriminatory democracy. Indianapolis: Liberty Fund.
Buchanan, J. M., & Tullock, G. (1962). The calculus of consent: Logical foundations of constitutional democracy. Ann Arbor: University of Michigan Press.
Buchanan, J. M., & Vanberg, V. (1989). Interests and theories in constitutional choice. Journal of Theoretical Politics, 1(1), 49–62.
Caplan, B. (2007). The myth of the rational voter: Why democracies choose bad policies. Princeton: Princeton University Press.
Chiebub, J. A. (2006). Presidentialism, parliamentarism, and democracy. Cambridge: Cambridge University Press.
Coll, S. (2008). The origins and evolution of democracy: An exercise in history from a constitutional economic approach. Constitutional Political Economy, 19(4), 313–355.
Congleton, R. D. (2004). Generality and the efficiency of government decision making. In C. K. Rowley & F. Schneider (Eds.), The encyclopedia of public choice. Boston: Springer.
Congleton, R. D. (2007). From royal to parliamentary rule without revolution: The economics of constitutional exchange within divided governments. European Journal of Political Economy, 23, 261–284.
Congleton, R. D. (2011). Perfecting parliament: Constitutional reform, liberalism, and the rise of Western democracy. Cambridge: Cambridge University Press.
de Lara, Y. G., Greif, A., & Jha, S. (2008). The administrative foundations of self-enforcing constitutions. American Economic Review, 98(2), 105–109.
Devins, C., Koppl, R., Kauffman, S., & Felin, T. (2015). Against design. Arizona State Law Journal, 47(3), 609–681.
Dove, J. A., & Young, A. T. (2019). US state constitutional entrenchment and default in the 19th century. Journal of Institutional Economics, forthcoming.
Eicher, T. S., García-Penalosa, & Kuenzel, D. J. (2018), Constitutional rules as determinants of social infrastructure. Journal of Macroeconomics, 57(#), 2018.
Elkins, Z., Ginsburg, T., & Melton, J. (2009). The endurance of national constitutions. Cambridge: Cambridge University Press.
Elster, J. (1979). Ulysses and the sirens. Cambridge: University of Cambridge Press.
Flaherty, M. S. (1996). The most dangerous branch. Yale Law Journal, 105(7), 1725–1839.
Ginsburg, T. (2010). Constitutional specificity, unwritten understandings and constitutional agreement. In A. Sajo & R. Utz (Eds.), Constitutional topography: values and constitutions. Netherlands: Eleven International Publishing.
Ginsburg, T. (2013). Constitutions as contract, constitutions as charter. In D. Gallagan & M. Versteeg (Eds.), Social and political foundations of constitutions. Cambridge: Cambridge University Press.
Ginsburg, B. (2016). Presidential government. New Haven: Yale University Press.
Ginsburg, T., & Melton, J. (2015). Does the constitutional amendment rule matter at all? Amendment cultures and the challenges of measuring amendment difficulty. International Journal of Constitutional Law, 13(3), 686–713.
Ginsburg, T., & Posner, E. A. (2010). Subconstitutionalism. Stanford Law Review, 62(6), 1583–1628.
Greene, A. S. (1994). Checks and balances in an eta of presidential lawmaking. University of Chicago Law Review, 61(1), 123–196.
Gwartney, J., Lawson, R. A., Hall, J. C., & Murphy, R. (2018). Economic freedom of the world: 2018 annual report. Vancouver: Fraser Institute.
Hadfield, G. K., & Weingast, B. R. (2014). Constitutions as coordinating devices. In S. Galliani & I. Sened (Eds.), Institutions, property rights, and economic growth. Cambridge: Cambridge University Press.
Hardin, R. (1989). Wy a constitution? In B. Grofman & D. Wittman (Eds.), The federalist papers and the new institutionalism. New York: Agathon Press.
Hall, J. C., & Lawson, R. A. (2014). Economic freedom of the world: An accounting of the literature. Contemporary Economic Policy, 32(1), 1–19.
Hayek, F. A. (1945). The use of knowledge in society. American Economic Review, 35(4), 519–530.
Hayek, F. A. (1960). The constitution of liberty. Chicago: University of Chicago Press.
Holcombe, R. G. (2018). Checks and balances: Enforcing constitutional constraints. Economies, 6(4), 1–12.
Holmes, S. (1995). Passions and constraint: On the theory of liberal democracy. Chicago: University of Chicago Press.
Kirzner, I. (1985). Discovery and the capitalist process. Chicago: University of Chicago Press.
Kogelmann, B., & Salter, A. W. (2019). Rawlsian originalism. Jurisprudence, forthcoming.
Kydland, F. E., & Prescott, E. C. (1977). Rules rather than discretion: The inconsistency of optimal plans. Journal of Political Economy, 85(3), 473–491.
Leeson, P. T. (2007). An-arrgh-chy: The law and economics of pirate organization. Journal ofPolitical Economy, 115(6), 1049–1094.
Leeson, P. T. (2009). The invisible hook: The hidden economics of pirates. Princeton: Princeton University Press.
Leeson, P. T. (2011). Government, clubs, and constitutions. Journal of Economic Behavior and Organization, 80(2), 301–308.
Leeson, P. T., & Suarez, P. A. (2016). An economic analysis of Magana carta. International Review of Law and Economics, 47(S), 40–46.
Leeson, P. T., & Subrick, J. R. (2006). Robust institutions. Review of Austrian Economics, 19(2–3), 107–111.
Levy, D. M. (2002). Robust institutions. Review of Austrian Economics, 15(2–3), 131–142.
Linz, J. L. (1978). The breakdown of democratic regimes: Crisis, breakdown and reequilibration. Baltimore: John Hopkins University Press.
Minkler, L., & Prakash, N. (2017). The role of constitutions on poverty: A cross-national investigation. Journal of Comparative Economics, 45(#), 563-581.
Mittal, S., & Weingast, B. R. (2011). Self-enforcing constitutions: With an application to democratic stability in America’s first century. Journal of Law, Economics, & Organization, 29(2), 278–302.
Montenegro, A. A. (1995). Constitutional design and economic performance. Constitutional Political Economy, 6(2), 161–169.
North, D. C., & Weingast, B. R. (1989). Constitutions and commitment: The evolutions of institutions governing public choice in seventeenth century England. Journal of Economic History, 49(4), 803–832.
Ordershook, P. C. (1992). Constitutional stability. Constitutional Political Economy, 3(2), 137–175.
Pennington, M. (2011). Robust political economy: Classical liberalism and the future of public policy. Cheltenham: Edward Elgar.
Pennington, M. (2015). Constitutional political economy and Austrian economics. In P. J. Boettke & C. J. Coyne (Eds.), Oxford handbook of Austrian economics. Oxford: Oxford University Press.
Persson, T., Roland, G., & Tabellini, G. (1997). Separation of powers and political accountability. Quarterly Journal of Economics, 112(4), 1163–1202.
Salter, A. W. (2015). Sovereignty as exchange of political property rights. Public Choice, 165(1), 79–96.
Salter, A. W. (2017). Constitutional drift and political dysfunction: Underappreciated maladies of the political commons. Independent Review, 21(4), 569–585.
Salter, A. W., & Furton, G. (2018). Emergent politics and constitutional drift: The fragility of procedural liberalism. Journal of Entrepreneurship and Public Policy, 7(1), 34–50.
Salter, A. W., & Young, A. T. (2018a). A theory of self-enforcing monetary constitutions with reference to the Suffolk system, 1825-1858. Journal of Economic Behavior & Organization, 156(1), 13–22.
Salter, A. W., & Young, A. T. (2018b). Medieval representative assemblies: Collective action and antecedents of limited government. Constitutional Political Economy, 29(2), 171–192.
Salter, A. W., & Young, A. T. (2019). Polycentric sovereignty: The medieval constitution, governance quality, and the wealth of nations. Social Science Quarterly, 100(4), 1241–1253.
Schelling, T. C. (1984). Choice and consequence: Perspectives of an errant economist. Cambridge: Harvard University Press.
Schlesinger Jr., A. M. (1973). The imperial presidency. Boston: Houghton Mifflin.
Skarbek, D. B. (2010). Putting the ‘con’ into constitutions: The economics of prison gangs. Journal of Law, Economics, and Organization, 26(2), 183–211.
Skarbek, D. B. (2014). The social order of the underworld: How prison gangs govern theAmerican penal system. Oxford: Oxford University Press.
Tarabar, D., & Young, A. T. (2019). What Constitutes a Constitutional Amendment Culture? In What constitutes a constitutional amendment culture? SSRN Working Paper. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3401894
Thomas, D. W., & Thomas, M. D. (2014). Entrepreneurship: Catallactic and constitutional perspectives. Review of Austrian Economics, 27(1), 11–22.
Tiebout, C. M. (1956). A pure theory of local expenditures. Journal of Political Economy, 64, 416–424.
Tsebelis, G. (2017). The time inconsistency of long constitutions: Evidence from the world. European Journal of Political Research, 56(4), 820–845.
Tsebelis, G., & Nardi, D. J. (2016). A long constitution is a (positively) bad constitution: Evidence from OECD countries. British Journal of Political Science, 46(2), 457–478.
Versteeg, M., & Zackin, E. (2016). Constitutions unentrenched: Toward an alternative theory of constitutional design. American Political Science Review, 110(4), 657–674.
Voigt, S. (2011). Positive constitutional economics II – A survey of recent developments. Public Choice, 146(1), 205–226.
Wagner, R. E. (2016). Politics as a peculiar business: Insights from a theory of entangled political economy. Cheltenham and Northamphton: Edward Elgar.
Wagner, R. E. (2018). Gordon Tullock’s scholarly legacy: Extracting it from Buchanan’s shadow. Independent Review, 23(2), 187–207.
Weingast, B. R. (2005). The constitutional dilemma of economic liberty. Journal of Economic Perspectives, 19(3), 98–108.
Wenzel, N. (2010). From contract to mental model: Constitutional culture as a fact of the social sciences. Review of Austrian Economics, 23(1), 55–78.
Young, A. T. (2019). Sovereignty and commitment. Working Paper.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher’s note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
This paper is an expansion of my presidential address to the Society for the Development of Austrian Economics (SDAE) in Washington D.C. on November 19, 2018. I thank Vincent Geloso and Alex Salter for helpful comments and criticisms based on the initial draft.
Rights and permissions
About this article
Cite this article
Young, A.T. How Austrians can contribute to constitutional political economy (and why they should). Rev Austrian Econ 32, 281–293 (2019). https://doi.org/10.1007/s11138-019-00482-9
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11138-019-00482-9
Keywords
- Constitutional political economy
- Constitutional drift
- Austrian economics
- Political catallaxy
- Robust political economy