How Austrians can contribute to constitutional political economy (and why they should)

Abstract

Will a society’s political agents provide good governance? An answer must be sought first and foremost at the constitutional level. While Austrians have made important contributions to constitutional political economy (CPE), they have often avoided interesting and important questions regarding today’s constitutional realities. This is particularly true when it comes to de jure constitutional design. Why do de jure constitutions matter? Can they be designed such that they are robust? When they are not robust, does constitutional drift lead to a better or worse governance environment? In discussing these questions, I attempt to point Austrian scholars towards some potentially fruitful CPE research avenues.

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Notes

  1. 1.

    In addition to providing the rules of the game for political agents, constitutions can also give form to the institutions via which governance is provided and elaborate on the ends towards which governance should be aimed. This broader characterization of a constitution is consistent with the one offered by Ginsburg (2010, p. 70): “First of all, they serve to constrain the government[. ...] Second, constitutions express fundamental values of the polity. [...] Third, constitutions elaborate on the institutions of government”; also see Elkins et al. (2009, pp. 38–39).

  2. 2.

    While these three separate functions are analytically useful, in practice they are not clearly delineated. For example, the form of governance institutions determines the relevant division or powers and checks and balances; it therefore determines, in part, the constraints on political agents.

  3. 3.

    I am more comfortable with the previously used “scholars steeped in the traditions of Austrian economics”. Many scholars understandably prefer not to be labeled and pigeonholed. To avoid verbiage, though, I will simply refer to “Austrians” moving forward, with apologies.

  4. 4.

    Of course, Austrian scholars may channel their work on comparative constitutional design towards other journals and into books. Perusing journals such as Public Choice and Constitutional Political Economy does not lead me to qualify my basic claim. One might also complain that I do not clearly define who I would count as “steeped in the traditions of Austrian economics”. This is a fair complaint and I am happy to, regarding my basic claim, ultimately plead take it or leave it! I also note that by “comparative constitutional design in the contemporary era” I refer to constitutions at the nation-state level. Thus, for example, I am discounting (only in the present context!) Skarbek’s (2010, 2014) excellent work on the constitutions of prison gangs, example of which include codifications.

  5. 5.

    These commitments are shared with the Virginia School of political economy, leading to an Austrian affinity for that brand of public choice analysis (Boettke and Leeson, 2004a; Thomas and Thomas 2014).

  6. 6.

    Expanding this point, CPE directs attention to “the design of effective rules to prevent the abuse of government power, and to facilitate government production that benefits the general population rather than concentrated special interests” (Holcombe 2018, p. 1).

  7. 7.

    Though see Wagner’s (2018) arguments that Tullock’s theorizing was more consistently rooted in process, evolution, and emergence that Buchanan’s: “Buchanan’s mental framework was grounded in concord and teleology; Tullock’s was grounded in conflict and evolution” (p. 1999).

  8. 8.

    Ginsburg (2013, pp. 184–185) also defends “constitutions as contract” by noting that in many cases “bargaining is an accurate description of the elite-level negotiations that produce the [constitutional] text [...]”. But the purpose of constitutional constraints is to prevent political elites from acting in their own interests and at the expense of the governed (Brennan and Buchanan 1985; Buchanan and Congleton 2003 [1998]; Holcombe 2018, pp. 4–5).

  9. 9.

    While focused neither on the contemporary era nor on the nation-state level, Leeson’s (2007, 2009) work on the codified constitutions of eighteenth and nineteenth century pirates should be acknowledged.

  10. 10.

    One might argue that the enforceability of the constitution would be part of the deliberation and design from “behind the veil of ignorance”. However, I am unaware of any thought experiment in the Buchanan and Tullock (1962) tradition that seriously deals with this.

  11. 11.

    I say generally in acknowledgement of Ginsburg’s (2013, pp. 186–188) argument that “in contemporary constitution-making, international actors may provide a degree of external enforcement[. ... And] that international involvement is becoming more the norm than the exception” (p. 186).

  12. 12.

    Relatedly, Barnett (2003) argues that judges should interpret the US Constitution according to its “original meaning” to be governed public, as opposed to the intent of the drafters. The “original meaning” is what individuals coordinated around; not whatever the drafters happened to have in mind.

  13. 13.

    Young (2019) makes the analogous argument regarding the case of medieval monarch’s in Europe convoking assemblies of the leading men of their realms. Monarchs’ commitments became more credible because they (perhaps unwittingly) promoted the sovereignty of those leading men as a collective. Salter and Young (2018b) argue that structure of those assemblies (three chambers with separate representation of nobles, clergy, and burghers versus two chambers with mixed representation) was important determinant of the extent to which monarchs’ absolutist tendencies were resisted. Relatedly, Bologna Pavlik and Young (2019a, b) present evidence that populations rooted in stronger medieval assembly traditions are associated with stronger property rights, rule of law, and state capacity today.

  14. 14.

    Of course, according to this view, effective constitutional design begins with successfully identifying which rules are feasible in the first place. That is no trivial task.

  15. 15.

    Also see the discussions in Dove and Young (2019) and Tarabar and Young (2019); what follows draws heavily on those discussions.

  16. 16.

    Though the entrenched-vs.-unentrenched and spare-vs.-specific dimensions can be considered separately, they are fundamentally related. More detailed constitutional provisions are more likely to become unsuitable as time passes and circumstances change; thus a greater (more frequent) demand for amendment.

  17. 17.

    “A constitution is Peter sober while the electorate is Peter drunk” (Holmes 1995, p. 135).

  18. 18.

    Bjørnskov and Voigt (2014) argue that the length of a constitution may reflect individuals’ level of social trust. When individuals are less trustful of political agents, they may feel he need to provide them with more detailed constraints and instructions. Related to the models of constitutional design discussed above, less (more) trust may be associated with a higher (lower) demand for “ongoing constitutional micromanagement”.

  19. 19.

    Recent examples include Eicher et al. (2018), who find that constitutional constraints on the executive and the structure of the electoral system are associated social infrastructure, and Minkler and Prakash (2017), who find the strength of constitutional language on economic and social rights is negatively related to poverty rates. Voigt (2011) reviews the empirical literature up to his point of writing; see his table 2 for a summary list of studies and their findings. I am not stating my agreement with the findings of these two specific studies or those overviewed by Voigt. Rather, they are representative of a literature to be engaged.

  20. 20.

    Emphasis is placed on the “corresponding”. Certainly, the US Constitution has been amended. However, the drift involves changes that do not correspond to de jure amendments.

  21. 21.

    That suspicion may be unwarranted; I may be projecting my own reaction – at least knee jerk – to such drift.

  22. 22.

    However, note that Kogelmann and Salter (2019) argue that, to maintain a well-ordered liberal democracy, the judiciary would do best to act as originalists, i.e., “holding that the meaning of the [de jure] constitution is fixed and stable, and interpretive changes are dangerous because they are likely to amount to de facto constitutional revisions, which should instead proceed according to formal amendment procedures[.]” I interpret their argument not as assuming that the de jure benchmark is, considered statically, necessarily better than the constitutional outcome of drift; rather, that constitutional drift forgoes the dynamic benefits of an entrenched constitution (see section 2.1 above).

  23. 23.

    Salter (2017, p. 580) acknowledges that “patterns [of constitutional drift] cannot be understood without a unified conception of how information problems relate to incentive problems.” He continues: “My theory provides this link, and although it is not sole explanation of political maladies, it is a particularly timely one.” I generally agree with this last statement. However, there is an important qualifier. Salter elaborates on incentives that are “problems” to the extent that they lead to constitutional drift in the direction of governance plagued by greater information problems. His theory certainly does provide, in this sense, and important link between incentive and information problems. However, the theory does not directly address the tradeoff between incentive and information problems that will be embodied in the governance of the initial constitution vis-à-vis the form it drifts to.

  24. 24.

    Salter (2017) does not use the term “constitution of liberty” (save in the references). The term is obviously derived from Hayek’s (1960) classic Salter and Furton (2018) do often employ the term in their text.

  25. 25.

    That this prior is “evident” is, well, evidenced by the following from Salter (2017, p. 570): “Political dysfunction is the conjunction of the incentive problem and the knowledge problem. I take the former as my point of departure and focus analytical efforts on the latter, showing the nature and importance of political dysfunction in the context of the American republic. Political dysfunction so conceived concerns those continuing James M. Buchanan’s (1975) project: enabling the protective state and the productive state while enfeebling the predatory state.” Salter generally comments favorably on Buchanan’s project, as do I.

  26. 26.

    See Hall and Lawson (2014) for a review of studies linking economic freedom to desirable economic outcomes.

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Correspondence to Andrew T. Young.

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This paper is an expansion of my presidential address to the Society for the Development of Austrian Economics (SDAE) in Washington D.C. on November 19, 2018. I thank Vincent Geloso and Alex Salter for helpful comments and criticisms based on the initial draft.

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Young, A.T. How Austrians can contribute to constitutional political economy (and why they should). Rev Austrian Econ 32, 281–293 (2019). https://doi.org/10.1007/s11138-019-00482-9

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Keywords

  • Constitutional political economy
  • Constitutional drift
  • Austrian economics
  • Political catallaxy
  • Robust political economy

JEL codes

  • B53
  • H10
  • P00
  • P16
  • P48