Constitutional Economics

Lecture in Summer Semester 2015

Constitutional Economics

Prof. Dr. Bernhard Neumärker

Albert-Ludwigs-Universität Freiburg
Department for Economic Policy and Constitutional Economic Theory

Schedule

Lecture: Prof. Dr. Bernhard Neumärker

Tutorial:

Additional Course: 17.07.2015, HS 1009 at 14-16h

Supplementary Tutorials:

General 1 - Monday - 12-14, Peterhof, R2 - Mihaela Pavlova
General 2 - Monday - 16-18, KG1, HS 1036 - Cami Plaza
NBS - Tuesday - 8 -10, KG3, HS 3117 - Mihaela Pavlova

Target Group and Language

• This course is designated for first-year students of the M.Sc. Economics program (economics and politics), the M.Sc. VWL program, and Diplom-Students (Hauptstudium). Exchange students are equally welcome to participate.
• If students of other faculties (e.g. political science) wish to participate, they should contact the tutor by email before the third week of the semester.
• Recommended prerequisites: Good knowledge of microeconomics and of the course "Economic Policy and Public Choice".
• This module is entirely taught in English.

Credits: 6 ECTS

• M.Sc. Economics: First-year course for profile ‘Economics and Politics’.
• M.Sc. VWL (PO2014): Constitutional Economics and Competition Policy.
• M.Sc. VWL (PO2011): Wirtschaftspolitisches Wahlpflichtmodul (Ordnungspolitik).
• M.Sc. BWL (Public and Non-Profit Management): Wahlbereich VWL.
• Diplom VWL: Hauptstudium, Pflichtfach „Wirtschaftspolitik: Ordnungspolitik“, Pflichtwahlfach „Ordnungs- und Wettbewerbspolitik“.
   

Downloads

• Outlines and slides are provided at this website. Literature will be provided on ILIAS.
• The passwords will be provided in the first lecture and first tutorial.

Lecture:

• Class Overview 
• Lecture Parts I and II 
   

Tutorial:

• Tutorial Overview
• Tutorial 1
• Tutorial 2 
• Tutorial 3 
• Tutorial 4 
• Tutorial 5 
• Tutorial 6 
• Tutorial 7 
• Tutorial 8 
• Tutorial 9

Sub-Tutorial:

• Sub-Tutorial Questions 

Outline (tentative)

1. Introduction
2. The constitutional perspective in economics
   
   1. Constitutional and orthodox view of economics [3,4,6]
   2. The methodological hard core of constitutional analysis [4,5]
   3. Constitutional economics as a part of modern political economy [11,24]
   4. The logic of constitutional constraints [3,5]
   5. Constitutional design and constitutional reform [2,4,12,15,19,22]
   6. Constitutions as social contracts
      6.1 Explicit and implicit contracts [17,19]
      6.2 Complete and incomplete contracts [11,15,19,23]
   7. Normative and positive constitutional economics
      7.1 Emergence and stability of constitutions [1,14,17,18,20, 25]
      7.2 Economic effects of constitutional rules [21,24]
      7.3 'Optimal' constitutions [12,17,19]
3. Applications
   
   1. Constitutional design of democratic institutions [1,8,12,17,25]
   2. Constitutional (liberal) Rights [17]
   3. Fiscal constitutions [3,16,19, 26]
   4. Liberal paternalism: Constitutional regulation of soft  paternalism
   5. Constitutional rules for market regulation [6,15]
   6. Constitutional change and rent-seeking [10,17]
   7. Economic policy consequences of constitutional arrangements [6,10,21]
       

References

• [1] Acemoglu, D., Robinson, J.A.: Economic Origins of Dictatorship and Democracy, Cambridge 2006.
• [2] Bailey, M.J.: Constitution for a Future Country, Basingstoke et al. 2001.
• [3] Brennan, G., Buchanan, J. M.: The Power to Tax, Cambridge et al. 1980.
• [4] Brennan, G., Buchanan, J. M.: The Reason of Rules, Cambridge et al. 1985.
• [5] Buchanan, J. M.: The Domain of Constitutional Economics, in: Constitutional Political Economy, vol. 1, no. 1 (1990), 1-18.
• [6] Buchanan, J. M.: The Constitution of Economic Policy, in: American Economic Review 77 (1987), 243-250.
• [7] Buchanan, J. M.: The Limits of Liberty, Chicago 1975.
• [8] Buchanan, J.M., Tullock, G.: The Calculus of Consent, Ann Arbor 1962.
• [9] Caplin, A. S, Nalebuff, B. J.: On 64%-Majority Rule, in: Econometrica, vol. 56(4) (1988), 787-814.
• [10] Cooter, R.D.: The Strategic Constitution, Princeton/N.J. et al. 2000.
• [11] Dixit, A.K.: The Making of Economic Policy, Cambridge/Mass. 1996.
• [12] Gersbach, H.: Designing Democracy, Berlin et al. 2005.
• [13] Greif, A.: Institutions and the Path to the Modern Economy, Cambridge 2006.
• [14] Hardin, R.: Liberalism, Constitutionalism, and Democracy, Oxford 1999.
• [15] Laffont, J.-J.: Incentives and Political Economy, Oxford et al. 2000.
• [16] Maskin, E. S., Riley, J. G.: Monopoly with incomplete information, in: RAND Journal of Economics, vol. 15, issue 2 (1985), 171-196.
• [17] Mueller, D.C.: Public Choice III, Cambridge 2003.
• [18] Mueller, D.C.: Constitutional Public Choice, in: Perspectives on Public Choice, Cambridge 1997.
• [19] Neumärker, K.J.B.: Some Analytical Foundations of Constitutional Public Finance, Manuscript, Freiburg 2009.
• [20] Neumärker, K.J.B.: Private Provision of Public Goods as Strategic Precommitment, Manuscript, Freiburg 2004.
• [21] Persson, T., Tabellini, G.: The Economic Effects of Constitutions, Cambridge/ Mass. 2003.
• [22] Salanié, B.: The Economics of Contracts, Cambridge et al. 2005, 2nd edition.
• [23] Tirole, J.: Incomplete Contracts: Where do we stand?, Econometrica, vol. 67, no. 4 (1999), 741-781.
• [24] Voigt, S.: Positive constitutional economics: A survey, in: Public Choice 90 (1997), 11–53.

Supplementary articles will be announced in the lecture and tutorial.