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Constitutional Rules


  • Toke S Aidt
  • Francesco Giovannoni



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.

Suggested Citation

  • Toke S Aidt & Francesco Giovannoni, 2004. "Constitutional Rules," The Centre for Market and Public Organisation 04/109, Department of Economics, University of Bristol, UK.
  • Handle: RePEc:bri:cmpowp:04/109

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    References listed on IDEAS

    1. Oliver Hart & John Moore, 1999. "Foundations of Incomplete Contracts," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 115-138.
    2. Davide Ticchi & Andrea Vindigni, 2010. "Endogenous Constitutions," Economic Journal, Royal Economic Society, vol. 120(543), pages 1-39, March.
    3. Torsten Persson & Gérard Roland & Guido Tabellini, 1997. "Separation of Powers and Political Accountability," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1163-1202.
    4. Hans Gersbach, 2002. "Democratic Mechanisms: Double Majority Rules and Flexible Agenda Costs," CESifo Working Paper Series 749, CESifo Group Munich.
    5. Salvador Barbera & Matthew O. Jackson, 2002. "Choosing How to Choose: Self Stable Majority Rules," Microeconomics 0211003, EconWPA.
    6. Matthias Messner & Mattias K. Polborn, 2004. "Voting on Majority Rules," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 115-132.
    7. Voigt, Stefan, 1997. "Positive Constitutional Economics: A Survey," Public Choice, Springer, vol. 90(1-4), pages 11-53, March.
    8. Giovanni Maggi & Massimo Morelli, 2006. "Self-Enforcing Voting in International Organizations," American Economic Review, American Economic Association, vol. 96(4), pages 1137-1158, September.
    9. Philippe Aghion & Alberto Alesina & Francesco Trebbi, 2004. "Endogenous Political Institutions," The Quarterly Journal of Economics, Oxford University Press, vol. 119(2), pages 565-611.
    10. Philippe Aghion & Patrick Bolton, 2003. "Incomplete Social Contracts," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 38-67, March.
    11. Giovannoni, Francesco, 2003. "Amendment Rules in Constitutions," Public Choice, Springer, vol. 115(1-2), pages 37-61, April.
    12. Mueller, Dennis C, 1991. "Constitutional Rights," Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(2), pages 313-333, Fall.
    13. Salvador Barbera & Matthew O. Jackson, 2004. "Choosing How to Choose: Self-Stable Majority Rules and Constitutions," The Quarterly Journal of Economics, Oxford University Press, vol. 119(3), pages 1011-1048.
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    Cited by:

    1. Toke Aidt & Francesco Giovannoni, 2011. "Critical decisions and constitutional rules," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 37(2), pages 219-268, July.

    More about this item


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

    JEL classification:

    • 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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