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Efficient constitution formation and maintenance: The role of “exit”


  • Anton Lowenberg
  • Ben Yu


A constitution will create mutual gains for all parties only if it is negotiated within an environment in which all parties possess viable exit options. The availability of exit options can substitute for a veil of uncertainty, which is difficult to operationalize in real-world settings. An efficient constitution also will be self-enforcing if it contains rules and principles geared to support political and market competition in the post-constitutional society. Again, the notion of exit is a useful way to characterize this condition for constitutional maintenance. Copyright George Mason University 1992

Suggested Citation

  • Anton Lowenberg & Ben Yu, 1992. "Efficient constitution formation and maintenance: The role of “exit”," Constitutional Political Economy, Springer, vol. 3(1), pages 51-72, December.
  • Handle: RePEc:kap:copoec:v:3:y:1992:i:1:p:51-72
    DOI: 10.1007/BF02393232

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    References listed on IDEAS

    1. Sandmo, Agnar, 1990. "Buchanan on Political Economy: A Review Article," Journal of Economic Literature, American Economic Association, vol. 28(1), pages 50-65, March.
    2. Buchanan, James M & Faith, Roger L, 1987. "Secession and the Limits of Taxation: Toward a Theory of Internal Exit," American Economic Review, American Economic Association, vol. 77(5), pages 1023-1031, December.
    3. Lowenberg, Anton D. & Yu, Ben T., 1992. "The role of the intellectual in economic development: A constitutional perspective," World Development, Elsevier, vol. 20(9), pages 1261-1277, September.
    4. Lowenberg, Anton D. & Yu, Ben T., 1990. "Constitutional environments and the contractual state: The cases of South Africa and Hong Kong," Journal of Comparative Economics, Elsevier, vol. 14(1), pages 51-69, March.
    5. Aaron Wildavsky, 1990. "A Double Security: Federalism as Competition," Cato Journal, Cato Journal, Cato Institute, vol. 10(1), pages 39-58, Spring/Su.
    6. Richard E. Wagner, 2004. "Wagner on Public Choice," American Journal of Economics and Sociology, Wiley Blackwell, vol. 63(1), pages 55-74, January.
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    Cited by:

    1. Ludwig van den Hauwe, 2005. "Constitutional economics," Public Economics 0508010, University Library of Munich, Germany, revised 22 Dec 2005.
    2. Vanberg Viktor, 1993. "Constitutionally Constrained and Safeguarded Competition in Markets and Politics with reference to a European Constitution," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 4(1), pages 1-26, March.
    3. Ludwig Van den Hauwe, 2005. "Constitutional Economics II," Chapters,in: The Elgar Companion to Law and Economics, Second Edition, chapter 13 Edward Elgar Publishing.

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