The calculus of piratical consent: the myth of the myth of social contract

Is a genuine social contract mythical? I argue that pirates created genuine social contracts that established a system of constitutional democracy based on the same decision-making calculus and with the same effects that Buchanan and Tullock’s contractarian theory of government describes in The Calculus of Consent. Pirates’ constitutional democracy is the “holy grail” of social contract theory. It demonstrates that the contractarian basis of constitutional democracy is more than a mere analytic device or hypothetical explanation of how such a government could emerge. In pirates’ case, Buchanan and Tullock’s social contract theory describes how constitutional democracy actually did emerge.     

Decision costs in legislative bargaining: an experimental analysis

We conduct an experiment to assess the effects of different decision rules on the costs of decision making in a multilateral bargaining situation. Specifically, we compare the amount of costly delay observed in an experimental bargaining game under majority and unanimity rule. Our main finding is that individual subjects are more likely to reject offers under unanimity rule. This higher rejection rate, as well as the requirement that all subjects agree, leads to more costly delay. This result provides empirical support for a classic argument in favor of less-than-unanimity decision rules put forth by Buchanan and Tullock (The calculus of consent: logical foundations of constitutional democracy, University of Michigan Press, Ann Arbor, 1962).     

Optimal voting rules under uncertainty

The theory of ‘constitutional’ choice of voting rules developed by Buchanan and Tullock is an extended to an explicit decision-theoretic form. Voters in the ‘constitutional’ position choose what they believe will be their optimal share or majority rule for making social decisions, by maximizing their individual expected utility from the anticipated social decisions, under conditions of uncertainty. The rule that maximizes expected social benefits depends upon (1) the expected distribution and intensity of preferences on future issues, and (2) the decisionmaking procedures and costs. ‘Decisionmaking’ and ‘external’ costs are shown to be interrelated. Following this analysis, failure to pass laws imposes ‘external’ costs in the same way that passing them does, so that the optimal majority may be lower when desirable laws are viewed as changing over time. Decisionmaking costs depend upon the way in which voters are persuaded to support or oppose bills, upon the distribution of preferences on bills, and on vote-trading possibilities. If vote-trading is almost costless, a wide range of decision rules has nearly equal social benefits. Finally, the model is used to discuss optimal voting rules for several decisionmaking bodies.     

Buchanan at the American Founding: the constitutional political economy of a republic of equals and unequals

Public Choice - James M. Buchanan cited the American Founding as an important inspiration for his constitutional vision. Buchanan and the Founders shared a belief in the moral equality of persons...     

Political Coase Theorem

This article considers theapplicability of the Coase theorem (in bothits positive and normative formulations) tothe political market. The articleanalogizes the choice of decision rules inthe political market to the choice of legalrules in the traditional Coase theorem andfurther analogizes alternative initialcoalitions to the different initialallocations of entitlements considered byCoase (1960). On the basis of theseanalogies, the paper examines the relevance(or lack thereof) of alternative votingrules and initial coalitions on the finalpolitical outcome. The article furthershows that, if all voters are allowed toenter into Coasian bargaining over thepolicy outcome to be adopted by themajority coalition (i.e., if politicalbargains are possible and are enforceable),uniqueness and stability are obtained. Theanalysis of the axiomatic Nash bargainingequilibrium yields an interesting geometricintuition. If voters have similar utilityfunctions centered around different idealpolicy points, the Coasian bargaining willbe conducive to the ``center of mass'' of thepolicy space, which weighs the agents'preferences as revealed in the bargainingprocess. Such ideal equilibrium satisfiesmost criteria of social welfare. Thearticle concludes considering the variouspractical limits of this ideal politicalmarket, whenever collective action andagency problems affect the politicalbargaining in a representative or directdemocracy. With all side payments prohibited,there is no assurance that collectiveaction will be taken in the most productiveway. (James M. Buchanan and Gordon Tullock, 1962)     

General interest and redistribution with self-interested voters: Social contract revisited

I provide a rational solution to the lasting paradox that citizens be more concerned with “general interest” than most economic agents. I show who that, in the face of fundamental political uncertainty, the social contract, as conceptualized by Jean-Jacques Rousseau two centuries ago, provides to self-interested voters an effective mechanism of self-insurance that limits amount of involuntary transfers. My positive theory of voter behavior and general interest has but a formal resemblance with the normative theory of welfare judgments and social justice. Even when the efficiency aspects of redistribution are not considered, there is no way in which the final distribution of incomes could be equal if the initial distribution of incomes were unequal! The role of political parties in this model is to manipulate the distribution of political chances in order to maximize their probability of winning elections. I show for instance that “social instability” and progressive redistribution characterize the equilibrium outcome of a two-class democracy in which the lower class forms a majority.     

The State of Enslavement: the East European Substitute for the State of Nature

Comparing the Soviet-type political system before the emergence of independent groups and movements with the state of nature in the contractarian tradition indicates that both these conditions havecommon features. The situation under the Soviet-type system is reminiscent of the state of nature since it has a pre-political, analytical, as well as a normative character. However, the Fact that the condition under the Soviet-type system is real and the state of nature is fictive poses a challenge to social contract orthodoxy which exclusively ascribes the pre-political and normative components to the state of nature. This interpretation renders invalid the main argument of the critics of contractarianism: that social contract theory is based upon the fictive state of nature and, therefore, upon the concept of an abstract human nature. Moreover, under special circumstances, it permits us to consider social contract theory not only as normative but also as empirical     

Lobbying and (de)centralization

This paper presents a positive theory of (de)centralization of policy decisions in an international union -defined as a supranational jurisdiction that may exercise a policy prerogative on behalf of member countries. I build a benchmark model where national lobbies can coordinate (i.e. form a trans-national lobby) at no cost and show that lobbying does not affect the fiscal regime. On the other hand, when interest groups cannot coordinate, decentralization emerges as a political equilibrium with lobbying. Policy centralization hurts national lobbies by increasing competition for influence. At a constitutional stage, interest groups induce politically motivated governments to reject centralization. Three extensions show that this result depends on the level of cross-border externalities; the voting rule at the constitutional stage; and the details of the institutional decision mechanism under centralization.     

The constitutional political economy of Gordon Tullock

This paper surveys Gordon Tullock’s contributions to constitutional political economy. His first major contribution was his joint project with James Buchanan on liberal constitutional design. The explicitly constitutional analysis of The Calculus was followed by a series of papers and books that focused on the use of resources in conflict, including Tullock’s contributions to the anarchy and rent-seeking literatures. Tullock also pioneered the rational choice-based analysis of dictatorships and the relative merits of alternative legal systems, topics that has been neglected until fairly recently by most scholars working in the CPE tradition.     

Constitutional political economy,democratic theory and institutional design

Democracy and constitutionalism are both central to the Western political tradition. And yet, constitutional restrictions are often perceived to be in tension with democratic commitments. I argue that the constitutional political economy approach developed by Nobel Laureate James Buchanan resolves the tension between constitutionalism and the values of democratic governance by shifting the analysis from a system-attributes perspective that focuses on the particular institutional properties of a political order to a system-legitimacy perspective that focuses on the manner in which political institutions gain democratic legitimacy. In so doing, the approach reveals that constitutionalism can be understood as a natural expression of democratic values.     

Rent-seeking and optimal regulation in replenishable resource industries

In this paper, wasteful rent-seeking behaviour has been shown to have important implications for the determination of the welfare maximizing regulatory policies of replenishable natural resource industries. In general, the incorporation of wasteful rent-seeking activity into the analysis leads to policies which suggest a greater level of industry output than has been advocated by tradition policies that do not take rent-seeking into account. Our analysis therefore supports a more laissez faire policy than has been recommended in the literature.Specifically, we find that when rents are completely dissipated by wasteful rent-seeking activity (t = 1), the role of the regulator is simply to guarantee biological efficiency, should this be threatened by the economic equilibrium achieved by the free-access of firms. One of two possibilities can occur. In the first, the economic equilibrium determined by the free-access of firms is biologically efficient, i.e., the equilibrium steady state of the replenishable natural resource exceeds or is equal to the maximum sustainable yield stock size (x _MSY). If this occurs, the regulator needs to take no action whatsoever. In the second case, the economic equilibrium generated by the free-access of firms does not yield biological efficiency. The equilibrium is characterized by a steady state stock of the natural resource that is smaller that the maximum sustainable yield stock size, namely (x _MSY <>x _MSY). In this case, therefore, the regulator does need to intervene, but his best policy takes the simple form of setting the total quota equal to the maximum sustainable yield (MSY) of the resource. Thus, while the results are to some extent consistent to those derived by Buchanan for the regulation of externalities, the fact that we are dealing here with replenishable resources adds a further dimension to the issue and changes some of the policy implications.     

Social contract theory and the semiotics of guns in America

We present a semiotic model of gun possession in America based upon the social contract theories put forward by Locke, Rousseau, and Rawls. Our central focus is upon the rights of self-preservation and the protection of property. The model proposes that American political history has cycled between two sets of symbolic threats to the social contract: tyranny imposed by a despotic central government and chaos represented by outsiders designated as savages. We propose that the two central semiotic images presented in the origin myth of the USA – that of pioneers living on a savage frontier and citizens rebelling against tyrannical government – endorse the individual possession of firearms. The specific models of guns chosen by private citizens are found to be closely intertwined with military patterns of usage; thus, the US military seems to serve as a rhetorical vessel from which cultural ideals of appropriate weaponry are derived. Examples of American autobiographical writings, contemporary gun advertising, and popular culture fictional narratives are presented to ground the arguments. We conclude that individual access to the use of deadly force for self-defense and the defense of property is the semiological basis of the American social contract and that US government efforts to reduce civilian possession of firearms are unlikely to succeed.     

Leviathans, federal transfers, and the cartelization hypothesis

Federal fiscal arrangements are argued to give rise to tacit collusion among competing Leviathans (Brennan and Buchanan, The Power to Tax, CUP, 1980). Though frequently encountered in academic and policy discussions, the cartelization hypothesis has rarely been scrutinized formally. This paper explores the effect of federal equalizing transfers on Leviathans engaged in tax competition. Contrary to the hypothesis, equalization is found to potentially complement tax competition in taming the Leviathan by implicitly taxing tax revenues extracted by the Leviathan. Thus, transfers might be an appropriate constitutional provision against fiscal expropriation.     

The theory of economic regulation and public choice and the determinants of public sector bargaining legislation

In this study we used the theory of economic regulation and public choice to derive a model to explain the pattern of public sector bargaining laws among the states. We find this type of legislation is influenced by the following demand factors: (1) the extent of public sector union membership, which represents the interest group hypothesis, has a positive influence on pro-union legislation; (2) the extent of employer opposition to unions, as measured by unfair labor practice charges against employers in representation elections, has a negative effect on bargaining laws; (3) two taste variables — the salaries of public employees and the percent of nonwhite employment in the state — have a positive influence on these laws. A result which will be surprising to many people is that the extent of private sector union membership has no significant influence on the passage of public sector bargaining legislation.Our empirical analysis indicates that supply factors are also important in explaining the pattern of public employee bargaining laws across the state. We find that states are more likely to enact pro-union legislation under the following conditions: (1) constituents appear to hold pro-labor views as represented by their Congressmen's voting record; (2) neighboring states have passed mandatory bargaining laws; and (3) when competition is greater among the political parties.     

The secular contract: sovereignty,secularism and law in Australia

What does it mean to say that a nation-state is secular? Secular law typically begins when a state has no religious competitor for authority. For this reason, it can be said that the Australian state is secular because its authority is derived from its own laws. What makes Australian law sovereign, the highest authority within the state, is its secularity. However, given Australia's colonial heritage, it is not just the absence of religious authority, such as a state religion, that gives the state its secularity. The law's foundations in colonial violence and the extinguishment of Indigenous sovereignty as a competing authority are also a crucial way in which secular Australian law can continue to operate as the sovereign authority within the state. Using the work of Charles W. Mills, I will critically interrogate how legal and political characterisations of the law as secular work to disavow the state's racialised foundations in colonial violence in the form of a “secular contract”. In developing this notion of a “secular contract” I hope to show that secularism be must re-thought of as not simply the operation of law without religion, but also, as complicit with the ways indigenous sovereignties in (post)colonial states are negated.     

The Turnover Trap: New Leaders, Reputation, and International Conflict

A formal model of crisis bargaining in the shadow of leadership turnover is analyzed where (1) successive leaders of the same state may differ in their resolve, (2) their resolve is private information, and (3) the probability of leadership turnover depends on bargaining behavior and conflict outcomes. The model provides novel answers to a number of questions about the relationship between an incumbent's time in office, the prospects of losing office, the anticipated behavior of future leaders, and the current probability of conflict. Taken together, these results add further weight to recent claims that leaders, not states, should be considered the fundamental units of analysis in international relations.     

Assessing the citizen – candidate model

Citizen–candidate models postulate a politics without political parties. Any citizen may become a candidate for office. A winner is chosen from among the candidates by voting with ties broken by the flip of a coin. All voters have preferences over a set of policies. The winning candidate adopts his preferred policy. It is proved on certain assumptions that there exists an equilibrium in these models and that the equilibrium is efficient. The significance of the proof is tested here with reference to the paradox of voting, the exploitation problem, the transposition of the Nash equilibrium from markets to politics, and constitutional constraints. The quest for a political equilibrium leads in the end to the recognition of a minimal rock-bottom requirement for cooperation and negotiation in democratic government.     

Social order through constitutional choice: A contractarian proposal

The present paper consists of two closely related parts: one which outlines a normative criterion for evaluating the legitimacy of constitutional change and one which specifies a particular proposal of a constitution. The criterion used stems directly from the "pragmatic" brand of contractarianism developed by Buchanan, where an approximate rule of unanimity is utilized. The proposal aims at the highest possible freedom of choice for individuals when it comes to defining the political system of their liking: a core (dealing with public goods and rights) is common for all, but everything else can vary between different sub-constitutions between which individuals choose.     

Institutional technology and economic growth

An endogenous model of constitutional changes and economic growth links the temporal decline in private market returns when technology is constant with the returns to rule changes realized in a political market. There is a steady state constitutional setting in which all rule changes have been incorporated that is analytically equivalent to the neoclassical steady state. As in the neoclassical model, private-sector technological progress postpones the steady state. To the extent the original constitutional setting promotes innovation, the evolutionary process toward the steady state is delayed. The model yields a theory of revolution based on forces leading to the adoption of inefficient changes in the constitutional setting.     

Toward Making a Proper Space for the Individual in the Ethiopian Constitution

A symbolic, normative, and institutional investigation of the 1995 Ethiopian Constitution reveals that the individual is displaced and locked in the periphery as much of the socio-economic and political ecology of the state is occupied by Nations, Nationalities and Peoples (NNPs). The Constitution presents and makes NNPs authors, sovereigns and constitutional adjudicators by adopting a corporate conception of group rights. As this corporate conception of group rights permeate and structure the organization of the Ethiopian state and government, the individual is relegated in the constitutional order. In order to make the transition to constitutional democracy sustainable, it is argued that the Constitution should accommodate and ensure individual autonomy by adopting a collective conception of group rights. This offers both the normative basis and institutional safeguards to strike a proper equilibrium between group rights and individual rights.