Advertisement

Escape from Europe: a calculus of consent model of the origins of liberal institutions in the North American colonies

  • Vlad Tarko
  • Kyle O’Donnell
Original Paper
  • 54 Downloads

Abstract

The migration out of Europe and the establishment of North American colonies presents us with a great puzzle: why did the colonists establish democratic forms of governance? Considering that early democratic colonies appeared even before philosophical works such as those of Locke and Montesquieu were written, it is difficult to make the case that ideology was the driving factor. We show that the calculus of consent model proposed by Buchanan and Tullock (The calculus of consent, Liberty Fund, Indianapolis, 1962) offers a simple but subtle solution this puzzle. Because migrants formed much more homogeneous communities, and because, thanks to the large geographical expanse, the inter-jurisdictional externalities were small, the efficient level of consensus within each colony was much greater than in Europe, and the scope of efficient centralized decision-making was much smaller. Hence, a structure of decentralized democratic communities emerged as the efficient outcome.

Keywords

Institutional formation Federalism Chesapeake Bay colonies New England colonies 

JEL Classification

D02 H41 P16 N41 

Notes

Acknowledgements

We thank Peter Boettke, Geoffrey Hodgson, Peter Leeson, Georg Vanberg, Richard Wagner and two anonymous reviewers for their comments on earlier versions of this paper. We also gratefully acknowledge the financial supportfrom the Mercatus Center at George Mason University, The Institute for Humane Studies, and the Earhart Foundation. Earlier versions of this paper were presented at the Public Choice Society conference in 2014, and at the Association for Private Enterprise Education conference in 2013.

References

  1. Acemoglu, D., Johnson, S., & Robinson, J. A. (2001). The colonial origins of comparative development: An empirical investigation. The American Economic Review, 91(5), 1369–1401.CrossRefGoogle Scholar
  2. Acemoglu, D., & Robinson, J. A. (2012). Why nations fail: The origins of power, prosperity, and poverty. New York: Crown Publishing.Google Scholar
  3. Aligica, P. D., & Tarko, V. (2014). Capitalist alternatives: Models, taxonomies, scenarios. London and New York: Routledge.Google Scholar
  4. Appleby, J. (1976). Liberalism and the American revolution. The New England Quarterly, 49(1), 3–26.CrossRefGoogle Scholar
  5. Appleby, J. (1978). The social origins of American revolutionary ideology. Journal of American History, 64(4), 935–958.CrossRefGoogle Scholar
  6. Appleby, J. (1984). Capitalism and a new social order: The republican vision of the 1790s. New York: New York University Press.Google Scholar
  7. Archer, R. (1990). New England mosaic: A demographic analysis for the seventeenth century. The William and Mary Quarterly, 47(4), 477–502.CrossRefGoogle Scholar
  8. Arrow, K. J. (1951). Social choice and individual values. New Haven: Yale University Press.Google Scholar
  9. Bailyn, B. (1967). The ideological origins of the American Revolution. Cambridge, MA: Harvard University Press.Google Scholar
  10. Bailyn, B. (1986). Voyagers to the west. New York: Random House.Google Scholar
  11. Beito, D. (1992). From mutual aid to the welfare state: Fraternal societies and social services. Cambridge: University of North Carolina Press.Google Scholar
  12. Black, D. (1958). The theory of committees and elections. Cambridge: Cambridge University Press.Google Scholar
  13. Brascoupé, S., & Etmanskie, J. (2006). Iroquois. In J. Birx (Ed.), Encyclopedia of anthropology. Thousand Oaks, CA: Sage Publications.Google Scholar
  14. Buchanan, J. M. 1968 [1999]. The demand and supply of public goods. Indianapolis, IN: Liberty Fund.Google Scholar
  15. Buchanan, J. M. (1987). Justification of the compound republic: The calculus in retrospect. Cato Journal, 7, 305–312.Google Scholar
  16. Buchanan, J. M., & Tullock, G. 1962 [1999]. The calculus of consent. Indianapolis, IN: Liberty Fund.Google Scholar
  17. Congleton, R. (2011). Perfecting parliament: Constitutional reform, liberalism, and the rise of western democracy. New York: Cambridge University Press.Google Scholar
  18. de Figueiredo, R. J. P., Jr, Rakove J., & Weingast, B. R. (2006). Rationality, inaccurate mental models, and self-confirming equilibrium: A new understanding of the American Revolution. Journal of Theoretical Politics, 18(4), 384–415.CrossRefGoogle Scholar
  19. Denzau, A. T., & North, D. C. (1994). Shared mental models: Ideologies and institutions. Kyklos, 47(1), 3–31.CrossRefGoogle Scholar
  20. Diamond, S. (1967). Values as an obstacle to economic growth: The American colonies. Journal of Economic History, 27(4), 561–575.CrossRefGoogle Scholar
  21. Downs, A. (1957). An economic theory of democracy. New York: Harper & Brothers.Google Scholar
  22. Ekelund, R. B., & Tollison, R. D. (1981). Mercantilism as a rent-seeking society: Economic regulation in historical perspective. College Station, TX: Texas A&M University Press.Google Scholar
  23. Fenton, W. N. (1998). The great law and the longhouse: A political history of the Iroquois Confederacy. Norman: University of Oklahoma Press.Google Scholar
  24. Fischer, D. H. (1989). Albion’s seed: Four British folkways in America. New York: Oxford University Press.Google Scholar
  25. Fogel, R. W., & Engerman, S. L. (1974). Time on the cross: The economics of American Negro slavery. Boston, MA: Little, Brown and Company.Google Scholar
  26. Gilardi, F. (2004). Institutional change in regulatory policies: Regulation through independent agencies and the three new institutionalisms. In J. Jordana & D. Levi-Faur (Eds.), The politics of regulation: Institutions and regulatory reforms for the age of governance (pp. 67–89). Cheltenham: Edward Elgar.Google Scholar
  27. Hirshleifer, J. (2001). The dark side of the force: Economic foundations of conflict theory. Cambridge: Cambridge University Press.Google Scholar
  28. Innes, S. (1995). Creating the commonwealth: The economic culture of Puritan New England. New York: W. W. Norton & Company.Google Scholar
  29. Kossinets, G., & Watts, D. J. (2009). Origins of homophily in an evolving social network. American Journal of Sociology, 115(2), 405–450.CrossRefGoogle Scholar
  30. Leeson, P. T. (2006). Cooperation and conflict. American Journal of Economics and Sociology, 65(4), 891–907.CrossRefGoogle Scholar
  31. Leeson, P. T. (2014). Anarchy unbound: Why self-governance works better than you think. Cambridge, New York: Cambridge University Press.CrossRefGoogle Scholar
  32. Lemke, J. S. (2016). Interjurisdictional competition and the Married Women’s Property Acts. Public Choice, 166(3–4), 291–313.CrossRefGoogle Scholar
  33. McCloskey, D. (2006). The bourgeois virtues: Ethics for an age of commerce. Chicago: University of Chicago Press.CrossRefGoogle Scholar
  34. McCloskey, D. (2010). Bourgeois dignity: Why economics can’t explain the modern world. Chicago: University of Chicago Press.CrossRefGoogle Scholar
  35. Meinig, D. W. (1986). The shaping of America: Atlantic America, 1492–1800. New Haven: Yale University Press.Google Scholar
  36. North, D. (1990). Institutions, institutional change and economic performance. New York: Cambridge University Press.CrossRefGoogle Scholar
  37. Nye, J. V. C. (1997). Thinking about the state: Property rights, trade, and changing contractual arrangements in a world with coercion. In J. N. Drobak & J. V. C. Nye (Eds.), Frontiers of the new institutional economics. London: Academic Press.Google Scholar
  38. Nye, J. V. C. (2007). War, wine, and taxes: The political economy of Anglo-French trade, 1698–1900. New Jersey: Princeton University Press.Google Scholar
  39. Olson, M. (1965). Logic of collective action: Public goods and the theory of groups. Cambridge: Harvard University Press.Google Scholar
  40. Olson, M. (1993). Dictatorship, democracy, and development. American Political Science Review, 87(3), 567–576.CrossRefGoogle Scholar
  41. Ostrom, V. (1987). The political theory of a compound republic: Designing the American experiment. Third, Revised edition. Lanham, MD: Lexington Books.Google Scholar
  42. Ostrom, E., & Ostrom, V. (2004). The quest for meaning in public choice. American Journal of Economics and Sociology, 63(1), 105–147.CrossRefGoogle Scholar
  43. Page, S. E. (2007). The difference: How the power of diversity creates better groups, firms, schools, and societies. Princeton: Princeton University Press.Google Scholar
  44. Reichel, P. L. (1992). The misplaced emphasis on urbanization in police development. Policing and Society: An International Journal, 3(1), 1–12.CrossRefGoogle Scholar
  45. Richter, D. K., & Merrell, J. H. (Eds.). (2003). Beyond the covenant chain: the Iroquois and their neighbors in Indian North America, 1600–1800. University Park, PA: Pennsylvania State University Press.Google Scholar
  46. Riker, W. H. (1962). The theory of political coalitions. New Haven: Yale University Press.Google Scholar
  47. Stigler, G. J. (1992). Law or economics? Journal of Law and Economics, 35(2), 455–468.CrossRefGoogle Scholar
  48. Tarko, V. (2015). The role of ideas in political economy. The Review of Austrian Economics, 28(1), 17–39.CrossRefGoogle Scholar
  49. Taylor, A. (2001). American colonies. New York: Penguin Books.Google Scholar
  50. Tullock, G. (1980a). Efficient rent seeking. In Buchanan, Tollison & Tullock (1980: pp. 97–112).Google Scholar
  51. Tullock, G. (1980b). Rent-seeking as a negative-sum game. In Buchanan, Tollison & Tullock (1980: pp. 16–36).Google Scholar
  52. Tullock, G. (1989). Rents, ignorance, and ideology. In The economics of special privilege and rent seeking. Studies in public choice (pp. 11–27). Dordrecht: Springer.Google Scholar
  53. Tullock, G. (1991). Rent seeking. In J. Eatwell, M. Milgate, & P. Newman (Eds.), The new Palgrave: The world of economics. New York: W.W. Norton.Google Scholar
  54. Wagner, R. E. (1988). The calculus of consent: A Wicksellian retrospective. Public Choice, 56(2), 153–166.CrossRefGoogle Scholar
  55. Wood, G. S. (1993). The radicalism of the American Revolution. New York: Vintage Books.Google Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Economics DepartmentDickinson CollegeCarlisleUSA
  2. 2.Economics Department, Mercatus CenterGeorge Mason UniversityFairfaxUSA

Personalised recommendations