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Constitutionalism, Division of Power and Transaction Costs

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Abstract

According to many democracy theorists, there is an unavoidable trade-off between constitutionalism and the need for political action. This paper criticizes that belief. Rather, it argues that a division of power, while sometimes entailing high political transaction costs, can nevertheless be beneficial and that it is not necessarily the case that a division of power does entail high transaction costs. The analysis expands the framework of Buchanan and Tullock (1962). Constitutionalism is thus defended against one of its main perceived deficiencies: its bringing about gridlock. This does not always happen, and when it does, it is often a good thing.

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  • Berggren, Niclas & Karlson, Nils, 2002. "Constitutionalism, Division of Power and Transaction Costs," Ratio Working Papers 3, The Ratio Institute.
    • Handle: RePEc:hhs:ratioi:0003
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    Cited by:

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    2. Wohlgemuth, Michael, 2004. "The Communicative Character of Capitalistic Competition: A Hayekian response to the Habermasian challenge," Freiburg Discussion Papers on Constitutional Economics 04/1, Walter Eucken Institut e.V..
    3. Mehrdad Vahabi, 2011. "Appropriation, violent enforcement, and transaction costs: a critical survey," Public Choice, Springer, vol. 147(1), pages 227-253, April.
    4. Niclas Berggren, 2012. "The Calculus of Consent: some Swedish connections," Public Choice, Springer, vol. 152(3), pages 313-321, September.
    5. Niclas Berggren & Christian Bjørnskov, 2022. "Political institutions and academic freedom: evidence from across the world," Public Choice, Springer, vol. 190(1), pages 205-228, January.
    6. Markus Leibrecht & Hans Pitlik, 2014. "Generalised Trust, Institutional and Political Constraints on the Executive and Deregulation of Markets," WIFO Working Papers 481, WIFO.
    7. Vahabi,Mehrdad, 2019. "The Political Economy of Predation," Cambridge Books, Cambridge University Press, number 9781107591370, January.

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    More about this item

    Keywords

    Political transaction costs; Constitutionalism; Political institutions; Division of power; Quality of political decision-making;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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