AbstractThis 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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Bibliographic InfoPaper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 04/109.
Length: 62 pages
Date of creation: Sep 2004
Date of revision:
constitutions; social contracts; majority rules; bill of rights; vetoes; referenda; amendments; checks and balances;
Other versions of this item:
- Francesco Giovannoni & Toke S. Aidt, 2004. "Constitutional Rules," Econometric Society 2004 North American Summer Meetings 540, Econometric Society.
- H10 - Public Economics - - Structure and Scope of Government - - - General
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
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