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  3. Political Economy of Institutions and Decisions

The Political Economy of Institutions and Decisions series focuses on two central questions: How do institutions evolve in response to individual incentives, strategies, and choices, and how do institutions affect the performance of political and economic systems? The series concentrates on answers to these questions based in methodological individualism. Its scope is comparative and historical rather than international or specifically American. Its focus is positive rather than normative, but many of the studies in the series offer analyses of informal institutional factors, such as social norms and culture, based on a rational-choice approach.

  • General Editors: Jeffry Frieden, Harvard University, Massachusetts, John Patty, University of Chicago, Elizabeth Maggie Penn, University of Chicago
  • Founding Editors: James E. Alt, Harvard University, Massachusetts, Douglass C. North, Washington University, St Louis

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83 results in Political Economy of Institutions and Decisions

Page 3 of 5

Imperfect Union
  • Representation and Taxation in Multilevel Governments
  • Christopher R. Berry
  • Published online:
    05 June 2012
    Print publication:
    14 September 2009
  • Imperfect Union offers the first political theory of special purpose jurisdictions, which constitute the most common form of local government in the United States today. Collectively, special purpose governments have more civilian employees than the federal government and spend more than all city governments combined. The proliferation of special purpose jurisdictions has fundamentally altered the nature of representation and taxation in local government. Citizens today are commonly represented by dozens - in some cases hundreds - of local officials in multiple layers of government. As a result, political participation in local elections is low and special interest groups associated with each function exert disproportionate influence. With multiple special-interest governments tapping the same tax base, the local tax base takes on the character of a common-pool resource, leading to familiar problems of overexploitation. Strong political parties can often mitigate the common-pool problem by informally coordinating the policies of multiple overlapping governments.

African Economies and the Politics of Permanent Crisis, 1979–1999
  • Nicolas Van de Walle
  • Published online:
    05 June 2012
    Print publication:
    24 September 2001
  • This 2001 book explains why African countries have remained mired in a disastrous economic crisis since the late 1970s. It shows that dynamics internal to African state structures largely explain this failure to overcome economic difficulties rather than external pressures on these same structures as is often argued. Far from being prevented from undertaking reforms by societal interest and pressure groups, clientelism within the state elite, ideological factors and low state capacity have resulted in some limited reform, but much prevarication and manipulation of the reform process, by governments which do not really believe that reform will be effective, which often oppose reforms because they would undercut the patronage and rent-seeking practices which undergird political authority, and which lack the administrative and technical capacity to implement much reform. Over time, state decay has increased.

Voter Turnout
  • A Social Theory of Political Participation
  • Meredith Rolfe
  • Published online:
    05 March 2012
    Print publication:
    13 February 2012
  • This book develops and empirically tests a social theory of political participation. It overturns prior understandings of why some people (such as college-degree holders, churchgoers and citizens in national rather than local elections) vote more often than others. The book shows that the standard demographic variables are not proxies for variation in the individual costs and benefits of participation, but for systematic variation in the patterns of social ties between potential voters. Potential voters who move in larger social circles, particularly those including politicians and other mobilizing actors, have more access to the flurry of electoral activity prodding citizens to vote and increasing political discussion. Treating voting as a socially defined practice instead of as an individual choice over personal payoffs, a social theory of participation is derived from a mathematical model with behavioral foundations that is empirically calibrated and tested using multiple methods and data sources.

Rationalizing Parliament
  • Legislative Institutions and Party Politics in France
  • John D. Huber
  • Published online:
    05 December 2011
    Print publication:
    28 August 1996
  • Rationalizing Parliament examines how institutional arrangements in the French Constitution shape the bargaining strategies of political parties. The book investigates the decision by French cities to include in the Constitution legislative procedures aimed to 'rationalize' the policy-making role of parliament and analyses the impact of these procedures on policy outcomes, cabinet stability and political accountability. Drawing on diverse methodological approaches, including formal models, multivariate statistics, historical analysis and qualitative case studies, Professor Huber contributes to general theoretical debates about the endogenous choice of institutions, and about the exogenous impact of institutional arrangements on political decision-making. Through its use of theories developed in the American politics literature, the study reveals important similarities between legislative politics in the United States and in parliamentary systems and shortcomings in conventional interpretations of French institutional arrangements.

Political Transformations and Public Finances
  • Europe, 1650–1913
  • Mark Dincecco
  • Published online:
    07 October 2011
    Print publication:
    26 September 2011
  • How did today's rich states first establish modern fiscal systems? To answer this question, Political Transformations and Public Finances by Mark Dincecco examines the evolution of political regimes and public finances in Europe over the long term. The book argues that the emergence of efficient fiscal institutions was the result of two fundamental political transformations that resolved long-standing problems of fiscal fragmentation and absolutism. States gained tax force through fiscal centralization and restricted ruler power through parliamentary limits, which enabled them to gather large tax revenues and channel funds toward public services with positive economic benefits. Using a novel combination of descriptive, case study and statistical methods, the book pursues this argument through a systematic investigation of a new panel database that spans eleven countries and four centuries. The book's findings are significant for our understanding of economic history and have important consequences for current policy debates.

Perspectives on Positive Political Economy
  • Edited by James E. Alt, Kenneth A. Shepsle
  • Published online:
    05 July 2011
    Print publication:
    28 September 1990
  • This volume serves as an introduction to the field of positive political economy and the economic and political processes with which it is concerned. This new research tradition is distinct from both normative and historical approaches to political economy. Grounded in the rational-actor methodology of microeconomics, positive political economy is the study of rational decisions in a context of political and economic institutions. More analytical than traditional approaches, it is concerned with the derivation of principles and propositions against which real-world experience may be compared. Its focus is on empirical regularities, and its goal is theoretical explanation. The field has focused on three main areas of research: models of collective action, constraints on competitive market processes, and the analysis of transaction costs. Developments in all of these areas are covered in the book. The first part of the volume surveys the field, while the second part displays positive political economy at work, examining a variety of subjects. The final part contains essays by leading political economists on the theoretical foundations of the field.

The Institutional Foundations of Public Policy in Argentina
  • A Transactions Cost Approach
  • Pablo T. Spiller, Mariano Tommasi
  • Published online:
    17 March 2011
    Print publication:
    30 April 2007
  • This book develops a general model of public policymaking, focusing on the difficulties of securing intertemporal exchanges among politicians. By using this model the authors are able to derive a series of empirical propositions about the conditions under which policies are likely to be volatile, rigid, or high quality. In addition, the authors combine the tools of game theory with Williamson's transaction cost theory, North's institutional arguments, and contract theory, to provide a general theory of public policymaking in a comparative political economy setting. They also undertake a detailed study of Argentina, using statistical analyses on newly developed data to complement their nuanced account of institutions, rules, incentives and outcomes. Drawing on this research the book explores the reasons for Argentina's seeming inability to design and implement high quality public policies over a sustained period of time.

The Economic Vote
  • How Political and Economic Institutions Condition Election Results
  • Raymond M. Duch, Randolph T. Stevenson
  • Published online:
    06 July 2010
    Print publication:
    17 March 2008
  • This book proposes a selection model for explaining cross-national variation in economic voting: Rational voters condition the economic vote on whether incumbents are responsible for economic outcomes, because this is the optimal way to identify and elect competent economic managers under conditions of uncertainty. This model explores how political and economic institutions alter the quality of the signal that the previous economy provides about the competence of candidates. The rational economic voter is also attentive to strategic cues regarding the responsibility of parties for economic outcomes and their electoral competitiveness. Theoretical propositions are derived, linking variation in economic and political institutions to variability in economic voting. The authors demonstrate that there is economic voting, and that it varies significantly across political contexts. The data consist of 165 election studies conducted in 19 different countries over a 20-year time period.

Multiparty Democracy
  • Elections and Legislative Politics
  • Norman Schofield, Itai Sened
  • Published online:
    06 July 2010
    Print publication:
    31 July 2006
  • This book adapts a formal model of elections and legislative politics to study party politics in Israel, Italy, the Netherlands, Britain, and the United States. The approach uses the idea of valence, that is, the party leader's non-policy electoral popularity, and employs survey data to model these elections. The analysis explains why small parties in Israel and Italy keep to the electoral periphery. In the Netherlands, Britain, and the US, the electoral model is extended to include the behavior of activists. In the case of Britain, it is shown that there will be contests between activists for the two main parties over who controls policy. For the recent 2005 election, it is argued that the losses of the Labour party were due to Blair's falling valence. For the US, the model gives an account of the rotation of the locations of the two major parties over the last century.

Modern Political Economy
  • Old Topics, New Directions
  • Edited by Jeffrey S. Banks, Eric Allen Hanushek
  • Published online:
    07 May 2010
    Print publication:
    25 August 1995
  • Political economy has been an essential realm of inquiry and has attracted myriad intellectual adherents for much of the period of modern scholarship. The discipline's formal split into the distinct studies of political science and economics in the nineteenth-century, while advantageous for certain scientific developments, has biased the way economists and political scientists think about many issues, and has placed artificial constraints on the study of many important social issues. This volume calls for a reaffirmation of the importance of the unified study of political economy, and explores the frontiers of the interaction between politics and markets. This volume brings together intellectual leaders of various areas, drawing upon state-of-the-art theoretical and empirical analysis from each of the underlying disciplines. Each chapter, while beginning with a survey of existing work, focuses on profitable lines of inquiry for future developments. Particular attention is devoted to fields of active current development.

Partisan Bonds
  • Political Reputations and Legislative Accountability
  • Jeffrey D. Grynaviski
  • Published online:
    05 May 2010
    Print publication:
    22 February 2010
  • Political scientists have long painted American voters' dependence on partisan cues at the ballot box as a discouraging consequence of their overall ignorance about politics. Taking on this conventional wisdom, Jeffrey D. Grynaviski advances the provocative theory that voters instead rely on these cues because party brand names provide credible information about how politicians are likely to act in office, despite the weakness of formal party organization in the United States. Among the important empirical implications of his theory, which he carefully supports with rigorous data analysis, are that voter uncertainty about a party's issue positions varies with the level of party unity it exhibits in government, that party preferences in the electorate are strongest among the most certain voters, and that party brand names have meaningful consequences for the electoral strategies of party leaders and individual candidates for office.

Southern Paternalism and the American Welfare State
  • Economics, Politics, and Institutions in the South, 1865–1965
  • Lee J. Alston, Joseph P. Ferrie
  • Published online:
    05 May 2010
    Print publication:
    13 January 1999
  • Using institutional economics, Professors Alston and Ferrie show how paternalism in Southern agriculture helped shape the growth of the American welfare state in the hundred years following the Civil War. It was an integral part of agricultural contracts prior to mechanization. Paternalism involved the exchange of 'good and faithful' labour services for a variety of in-kind services, most notably protection from physical violence. The Southern landed elite valued paternalism because it reduced monitoring costs and turnover. Workers valued paternalism because of the lack of civil rights. In order to maintain the value of paternalism to their workers, the agricultural interests needed to prevent meddling from the federal government, which they accomplished through their disproportionate political power. Only the advent of mechanization and complementary technology in the late 1950s and early 1960s finally reduced the desire of Southern agricultural interests to fight the expansion of federal welfare programmes.

Partisan Politics, Divided Government, and the Economy
  • Alberto Alesina, Howard Rosenthal
  • Published online:
    04 May 2010
    Print publication:
    27 January 1995
  • This book develops an integrated approach to understanding the American economy and national elections. Economic policy is generally seen as the result of a compromise between the President and Congress. Because Democrats and Republicans usually maintain polarised preferences on policy, middle-of-the-road voters seek to balance the President by reinforcing in Congress the party not holding the White House. This balancing leads, always, to relatively moderate policies and, frequently, to divided government. The authors outline the rational partisan business cycle, where Republican administrations begin with recessions, and Democratic ones with expansions, and the midterm cycle, where the President's party loses votes in the midterm congressional election. The book argues that both cycles are the result of uncertainty about the outcome of presidential elections. Other topics covered include retrospective voting on the economy, coat-tails, and incumbency advantage.

The Fruits of Revolution
  • Property Rights, Litigation and French Agriculture, 1700–1860
  • Jean-Laurent Rosenthal
  • Published online:
    27 March 2010
    Print publication:
    28 February 1992
  • In The Fruits of Revolution Jean-Laurent Rosenthal investigates two central questions in French economic history: To what extent did institutions hold back agricultural development under the Old Regime, and did reforms carried out during the French Revolution significantly improve the structure of property rights in agriculture? Both questions have been the subject of much debate. Historians have touched on them in a number of local studies, yet usually they have been more concerned with community conflict than with economic development. Economists generally have researched the performance of the French economy without paying much attention to the impact of institutions on specific areas of the economy. This book attempts to utilize the best of both approaches: It focuses on broad questions of economic change, yet it is based on detailed archival investigations of the impact of property rights on water control.

Contracting for Property Rights
  • Gary D. Libecap
  • Published online:
    24 March 2010
    Print publication:
    26 January 1990
  • In this book the author examines the problems encountered in negotiations among claimants and the political and economic considerations that influence property rights arrangements. The histories of mineral rights, rights to range and timber land, as well as fishery and crude oil production rights in the United States are examined and reveal a surprising variety of contractual negotiations and economic outcomes. The author concludes that in addition to an analysis of distributional outcomes, an examination of the details of the political bargaining underlying property rights contracts is essential to an understanding of why rights emerge as they do. The book is an important contribution to both property rights theory and to American economic history.

Veto Bargaining
  • Presidents and the Politics of Negative Power
  • Charles M. Cameron
  • Published online:
    20 January 2010
    Print publication:
    19 June 2000
  • The late-twentieth century has given rise to the most concentrated period of divided party government in American history. With one party controlling the presidency and the opposing party controlling Congress, the veto has inevitably become a critical tool of presidential power. Combining sophisticated game theory with unprecedented data, this book analyzes how divided party presidents use threats and vetoes to wrest policy concessions from a hostile Congress. Case studies of the most important vetoes in recent history add texture to the analysis, detailing how President Clinton altered the course of Newt Gingrich's Republican Revolution. Offering the first book-length analysis to bring rational choice theory to bear on the presidency, Veto Bargaining offers a major contribution to our understanding of American politics in an age of divided party government.

The Transformation of Property Rights in the Gold Coast
  • An Empirical Study Applying Rational Choice Theory
  • Kathryn Firmin-Sellers
  • Published online:
    08 January 2010
    Print publication:
    05 December 1996
  • This book explores the political process by which property rights are defined and enforced in two traditional states in colonial Ghana. The case studies within the book ask how colonial institutions transformed indigenous political and economic life; and how colonization and decolonization affected prospects for future economic development and stability in Africa. The introductory chapter outlines a theory of the transformation of property rights systems. The remaining empirical chapters refine this theory through a detailed analysis of the transformation of property rights within an African context. These chapters draw explicitly on rational choice theories to analyse indigenous actors' attempts to redefine and enforce property rights to land by 'reinventing' the traditions of their respective communities. These theories help to understand why property rights systems across Africa remain fluid and insecure.

Making and Breaking Governments
  • Cabinets and Legislatures in Parliamentary Democracies
  • Edited by Michael Laver, Kenneth A. Shepsle
  • Published online:
    06 January 2010
    Print publication:
    26 January 1996
  • Making and Breaking Governments offers a theoretical argument about how parliamentary parties form governments, deriving from the political and social context of such government formation its generic sequential process. Based on their policy preferences, and their beliefs about what policies will be forthcoming from different conceivable governments, parties behave strategically in the game in which government portfolios are allocated. The authors construct a mathematical model of allocation of ministerial portfolios, formulated as a noncooperative game, and derive equilibria. They also derive a number of empirical hypotheses about outcomes of this game, which they then test with data drawn from most of the postwar European parliamentary democracies. The book concludes with a number of observations about departmentalistic tendencies and centripetal forces in parliamentary regimes.

Consent, Dissent, and Patriotism
  • Margaret Levi
  • Published online:
    10 December 2009
    Print publication:
    13 October 1997
  • Democratic governments are able to elicit, legally and legitimately, both money and men from their populations. Certainly there is tax evasion, draft evasion, and even outright resistance; yet to a remarkable extent citizens acquiesce and even actively consent to the demands of governments, well beyond the point explicable by coercion. This is a puzzle for social scientists, particularly those who believe that individuals are self-interested, rational actors who calculate only the private egoistic costs and benefits of possible choices. The provisions of collective good should never justify a quasi-voluntary tax payment and the benefits of a war could not possibly exceed the cost of dying. This book explains the institutionalization of policy in response to anticipated and actual citizen behaviour and the conditions under which citizens give, refuse and withdraw their consent. Professor Levi claims that citizens' consent is contingent upon the perceived fairness of both the government and of other citizens. Most citizens of democracies, most of the time, are more likely to give their consent if they believe that government actors and other citizens are behaving fairly toward them.

A Theory of the State
  • Economic Rights, Legal Rights, and the Scope of the State
  • Yoram Barzel
  • Published online:
    04 December 2009
    Print publication:
    03 December 2001
  • This book models the emergence of the state, and the forces that shape it. State creation is bound to protection needs. A specialized protector-ruler is efficient, but is also self-seeking. Individuals will install a ruler only after they create a mechanism to control him. Among the offshoots of the organized protection are legal system and decision-making procedures that include voting. The initial 'state of nature' may gradually evolve into a rule-of-law state. The state endows individuals with rights by delineating what it will protect. Enforcement, however, is never perfect. People use third parties such as firms to enforce agreements. As commodities become standardized, scale economies increase. In order to exploit the economies of within-state enforcement, the state will expand the contact enforcement territory by treaty or by conquest. The force may explain the creation of rule-of-law empires.

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