Abstract
In contrast to the contractarian approach to constitutional economics, we follow Voigt (1999) in assuming that constitutional rules are closely connected to informal institutions and that their evolution is a matter of interest group activity and implicit re-interpretation. We add to this the assumption of theoretical uncertainty of individuals regarding the working properties of constitutional rules. Collective learning processes are considered as the third driving force of constitutional evolution, and at the same time as the source of path-dependencies which allow suboptimal constitutions to persist. Finally, it is argued that direct legislation offers more protection than a written fiscal constitution.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Arthur, W. B., Ermoliev, Y. M. & Kaniovski, Y. M. (1983). “A Generalized Urn Process and Its Applications.” Cybernetics. 19, 61–71.
Benz, M. & Stutzer, A. (2002). “Are Voters Better Informed when They Have a Larger Say in Politics?” Discussion Paper, Institute for Empirical Research in Economics, University of Zürich.
Brennan, G. & Buchanan, J. M. (1980). The Power to Tax. Analytical Foundations of a Fiscal Constitution, Cambridge: Cambridge University Press.
Brenner, Th. (1999). Modelling Learning in Economics, Cheltenham, Elgar.
Buchanan, J. M. (1975). The Limits of Liberty. Between Anarchy and Leviathan, Chicago: Chicago University Press.
Buchanan, J. M. (1987). “The Constitution of Economic Policy.” American Economic Review, 77, 243–250.
Buchanan, J. M. & Tullock, G. (1962). The Calculus of Consent, Ann Arbor: University of Michigan Press.
Buchanan, J. M. & Vanberg, V. J. (1989). “Interests and Theories in Constitutional Choice.” Journal of Theoretical Politics. 1, 49–62.
Denzau, A. (1985). “Constitutional Change and Agenda Control.” Public Choice. 47, 183–217.
Figlio, D. N. & O'Sullivan, A. (2001). “The Local Response to Tax Limitation Measures: Do Local Governments Manipulate Voters to Increase Revenues?” Journal of Law and Economics. 44, 233–257.
Gigerenzer, G. & Selten, R. (2001). “Rethinking Rationality.” In G. Gigerenzer & R. Selten (eds.), Bounded Rationality: The Adaptive Toolbox. Cambridge, Mass: MIT Press.
Güth, W. & Tietz, R. (1990). “Ultimatum Bargaining Behaviour. A Survey and Comparison of Experimental Results.” Journal of Economic Psychology. 11, 417–449.
Hayek, F. A. von (1973). Rules and Order. Law, Legislation and Liberty Vol. 1, London: Routledge & Kegan Paul.
Hayek, F. A. von (1979). The Political Order of a Free People. Law Legislation and Liberty Vol. 3, London: Routlege & Kegan Paul.
Kirchgässner, G. & Werner W. Pommerehne (1993). “Low-Cost Decisions as a Challenge to Public Choice.” Public Choice. 77, 107–115.
Knight, J. (1992). Institutions and Social Conflict, Cambridge: Cambridge University Press.
Kuran, T. (1987). “Preference Falsification, Policy Continuity and Collective Conservatism.” Economic Journal. 97, 642–665.
Meier, A. & Haury, S. (1990). “A Cognitive-Evolutionary Theory of Economic Policy.” In K. Dopfer & K. F. Raible (eds.), The Evolution of Economic Systems, London: Macmillan.
Mueller, D. C. (2002). “The Importance of Uncertainty in a Two-Stage Theory of Constitiutions.” In G. Brennan, H. Kliemt & R. D. Tollison (eds.), Method and Morals in Constitutional Economics, Berlin et al.: Springer.
O'Sullivan, A., Sexton, T. A. & Sheffrin, S. M. (1995). Property Taxes and Tax Revolts. The Legacy of Proposition 13, Cambridge: Cambridge University Press.
Preston, A. E. & Ichniowski, C. (1991). “A National Perspective on the Nature and Effects of the Local Property Tax Revolt 1976-86.” National Tax Journal. 44, 123–145.
Roth, A. E. (1995). “Bargaining Experiments.” In J. H. Kagel & A. E. Roth (eds.), The Handbook of Experimental Economics, Princeton: Princeton University Press.
Schnellenbach, J. (2002). Tax Morale, Leviathan and the Political Process. Paper presented at the Annual Conferences of the Royal Economic Society (Warwick, UK, March 24-27) and the European Public Choice Society (Belgirate, Italy, April 4-7).
Slembeck,T. (1997). “The Formation of Economic Policy:ACognitive-Evolutionary Approach to Policy-Making.” Constitutional Political Economy. 8, 225–254.
Tullock, G. (1987). “The Calculus: Postscript After 25 Years.” Cato Journal. 7, 313–322.
Vanberg, V. J. (1994). “Hayek's Constitutional Political Economy.” In V. J. Vanberg (ed.), Rules and Choice in Economics. London: Routledge.
Vanberg, V. J. & Buchanan, J. M. (1991). “Constitutional Choice, Rational Ignorance and the Limits of Reason.” Jahrbuch für Neue Politische Ökonomie. 10, 61–78.
Voigt, S. (1999). Explaining Constitutional Change. A Positive Economics Approach. Cheltenham: Elgar.
Wohlgemuth, M. (2002). “Democracy and Opinion Falsification: Towards a New Austrian Political Economy.” Constitutional Political Economy. 13, 223–246.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Schnellenbach, J. The Evolution of a Fiscal Constitution When Individuals are Theoretically Uncertain. European Journal of Law and Economics 17, 97–115 (2004). https://doi.org/10.1023/A:1026389926709
Issue Date:
DOI: https://doi.org/10.1023/A:1026389926709