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Constitutional Rules

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  • Toke S Aidt
  • Francesco Giovannoni

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Abstract

This paper proposes a normative theory of constitutional rules. The first-best cannot be achieved whenever constitutional rules cannot be made contingent on information about the costs and benefits of policy reforms. We characterize and welfare rank four classes of second best constitutions: constitutions that specify one rule for all types of decisions; constitutions that provide incentives for information about costs and benefits to be revealed; constitutions that allow for vetoes from interested parties and constitutions that specify different rules for different policy areas. In addition, we provide conditions for the existence of amendment rules that allow for changes to the original constitutional rules after the constitutional stage. Finally, we provide a new rationale for the existence of checks and balances.

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File URL: http://www.bris.ac.uk/Depts/CMPO/workingpapers/wp109.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 04/109.

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Length: 62 pages
Date of creation: Sep 2004
Date of revision:
Handle: RePEc:bri:cmpowp:04/109

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Keywords: constitutions; social contracts; majority rules; bill of rights; vetoes; referenda; amendments; checks and balances;

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References

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  1. Salvador Barbera & Matthew O. Jackson, 2004. "Choosing How to Choose: Self-Stable Majority Rules and Constitutions," The Quarterly Journal of Economics, MIT Press, vol. 119(3), pages 1011-1048, August.
  2. Salvador Barbera & Matthew O. Jackson, 2002. "Choosing How to Choose: Self Stable Majority Rules," Microeconomics 0211003, EconWPA.
  3. Philippe Aghion & Albero Alesina & Francesco Trebbi, 2002. "Endogenous Political Institutions," Harvard Institute of Economic Research Working Papers 1957, Harvard - Institute of Economic Research.
  4. Oliver Hart & John Moore, 1998. "Foundations of Incomplete Contracts," Harvard Institute of Economic Research Working Papers 1846, Harvard - Institute of Economic Research.
  5. Mueller, Dennis C, 1991. "Constitutional Rights," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(2), pages 313-33, Fall.
  6. Ticchi, Davide & Vindigni, Andrea, 2003. "Endogenous Constitutions," Seminar Papers 726, Stockholm University, Institute for International Economic Studies.
  7. Giovanni Maggi & Massimo Morelli, 2006. "Self-Enforcing Voting in International Organizations," American Economic Review, American Economic Association, vol. 96(4), pages 1137-1158, September.
  8. Gersbach, Hans, 2005. "Democratic Mechanisms: Double Majority Rules and Flexible Agenda Costs," CEPR Discussion Papers 5013, C.E.P.R. Discussion Papers.
  9. Matthias Messner & Mattias K. Polborn, 2004. "Voting on Majority Rules," Review of Economic Studies, Wiley Blackwell, vol. 71(1), pages 115-132, 01.
  10. Torsten Persson & Gerard Roland & Guido Tabellini, . "Separation of Powers and Political Accountability," Working Papers 100, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  11. Voigt, Stefan, 1997. " Positive Constitutional Economics: A Survey," Public Choice, Springer, vol. 90(1-4), pages 11-53, March.
  12. Aghion, Philippe & Bolton, Patrick, 2003. "Incomplete Social Contracts," Scholarly Articles 4554123, Harvard University Department of Economics.
  13. Giovannoni, Francesco, 2003. " Amendment Rules in Constitutions," Public Choice, Springer, vol. 115(1-2), pages 37-61, April.
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Cited by:
  1. Aidt, T.S. & Giovannoni,F., 2005. "Critical Decisions and Constitutional Rules," Cambridge Working Papers in Economics 0523, Faculty of Economics, University of Cambridge.

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