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From Collapse to Constitution: The Case of Iceland

Abstract

Most of the time, crises precede constitutions. Following a brief review of relevant historical background, this chapter aims to show why Iceland, after its financial collapse in 2008, is now at last on the road to adopting a new constitution to replace the provisional constitution from 1944. The aim is also to show how the constitutional bill of 2011 came into being with significant help from the general public. Further, the chapter outlines some of the key provisions of the bill as well as why and how it differs from the current constitution. The chapter concludes by offering a brief discussion of some potential obstacles to the adoption of the bill in parliament, the role of the public, and some lessons from, and for, other countries.

Keywords

  • Gross Domestic Product
  • Voter Turnout
  • Parliamentary Election
  • Progressive Party
  • Constitutional Protection

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

The author is Professor of Economics at the University of Iceland, and was one of 25 representatives in Iceland’s Constitutional Council in session from 1 April to 29 July 2011, elected by the nation and appointed by parliament to revise Iceland’s constitution. Readers unfamiliar with Iceland’s situation may wish to consult Gylfason et al. (2010, Chap. 7) for background. The author thanks Ragnar Adalsteinsson, Rabah Arezki, Lýdur Árnason, Vilhjálmur Árnason, Jon Elster, Eyjólfur Kjalar Emilsson, Benedikt Goderis, Gudmundur Gunnarsson, Pétur Gunnarsson, Jón Baldvin Hannibalsson, Gudmundur Hálfdanarson, Hjördís Hákonardóttir, Hjörtur Hjartarson, Valur Ingimundarson, Ólafur Ísleifsson, Örn Bárdur Jónsson, Illugi Jökulsson, Helgi Skúli Kjartansson, Sixten Korkman, Svanur Kristjánsson, Katrín Oddsdóttir, Hermann Oskarsson, Sigrídur Ólafsdóttir, Jón Thór Ólafsson, Lárus Ýmir Óskarsson, Agnar Sandmo, Birgitta Swedenborg, Ragnar Torvik, Mila Versteeg, Leif Wenar, and seminar participants at the Stockholm School of Economics for their encouraging and constructive comments on earlier versions of the text.

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Notes

  1. 1.

    In March 2012 the UNHRC “decided, in light of the measures taken so far by the State party to give effect to the Committee‘s views, not to examine the case any further under the follow-up procedure, with a note of partly satisfactory implementation of its recommendation.” By “partly satisfactory implementation” was meant, according to an announcement from Iceland’s Ministry of Foreign Affairs in June 2012, that in February 2009 the “Minister of Fisheries … reiterated on behalf of the government that it had been decided to strengthen the human rights provisions of the constitution and to consolidate that resources of the sea are a common property of the nation …” (my translation).

  2. 2.

    In this spirit, Brennan and Buchanan (1977) argue that farsighted, principled politicians should write tax laws aimed at restricting the expansion of the public sector rather than try to maximize their following in keeping with the teachings of the public choice school (Buchanan and Tullock 1962). See also Mueller (2000).

  3. 3.

    The National Assembly followed the example of a privately organized assembly convened in 2009 by a group of citizens experimenting with collective intelligence.

  4. 4.

    The former prime minister was found guilty on one count—not convening cabinet meetings on the banking crisis before the banks collapsed—but he was acquitted, though severely criticized by the Court, on three other counts. Two further counts had earlier been dismissed from the original six-count indictment by parliament.

  5. 5.

    When the presidential election of 2012 was challenged by three handicapped voters claiming that because they were forced to accept help from election officials in the voting booth the ballot was not secret, the Supreme Court reversed course, dismissing the complaint on the grounds that the election results could not have been affected by the alleged lack of secrecy.

  6. 6.

    In view of Ackerman’s (2004) hypothesis that, through popular involvement, people have a more positive view of their government and government institutions, it would be interesting to investigate empirically whether the delegates at the National Assembly remain as distrustful of parliament as the population at large.

  7. 7.

    Gender equality through affirmative action might also be helpful in banking and finance in view of empirical evidence that women are more averse to risk than men (Barber and Odean 2001). Lehman Sisters might still be standing.

  8. 8.

    To be fair, one or two parliament members of the Progressive Party, the smaller of the two opposition parties, have expressed support for the bill. Likewise, some members of the governing coalition oppose the bill.

  9. 9.

    For a further comparison between Iceland in 2011–2012 and the United States in 1787–1788, see Gylfason (2012).

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Correspondence to Thorvaldur Gylfason .

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Gylfason, T. (2013). From Collapse to Constitution: The Case of Iceland. In: Paganetto, L. (eds) Public Debt, Global Governance and Economic Dynamism. Springer, Milano. https://doi.org/10.1007/978-88-470-5331-1_22

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