The Locke Institute series – serie

This book is an important addition to the emerging body of new work on capital. Its primary contribution is in analysing capital investment choice as a process. The understanding of this process requires some modification and significant extension to the standard neo-classical economic tools.Capital and Uncertainty is a non-mathematical text, modernizing and adding to the existing thought in this area, with insights from game theory, rational choice under uncertainty and new institutional economics. Dr Runge also draws upon 25 years of business experience in setting out a thorough and immensely practical exposition of the risk/return trade-off and how major capital investment decisions are made within firms.Topics studied include:the nature of capital investment decisionsentrepreneurship and the market ordercapital investment choice processescapital investment modelscapital decisions: choices between strategiesEconomists, industrial organisation specialists, business academics and practitioners alike will all find this book of immense interest and use.

The future of European Monetary Union (EMU) stands as one of the most important economic issues of the era. The author argues that in the event of macroeconomic shocks, rather than acting as a cohesive force, EMU could give rise to disunity. As EMU is not an optimal currency area, asymmetric shocks affecting each country differently could be critical to its future. The success of EMU depends upon the ability of institutions in the EU to satisfy the monetary and fiscal policy demands of sufficient numbers of national constituents, interest groups, and multinational corporations. This book employs principles from public choice to analyze the EU institutions that participate in the monetary policy making process of EMU and assesses whether they have the mechanisms to cope with asymmetric macroeconomic shocks. In particular, it examines the European Council, Council of Ministers, European Commission, European Parliament and the European Central Bank.This book provides an invaluable critique of the EMU plan and will be of interest to scholars of European economics, macroeconomics and public choice.

The design of an electoral system is fundamental to any democracy. It is through electoral systems that the commitment of a society to a political system is achieved. The peculiarities of an electoral system assume significant importance in periods in which democratic polities seem caught between a crisis of confidence in their representative systems and mass apathy over the product of government - as has recently occurred in Italy.Electoral rules constrain available choice alternatives and therefore have profound effects on governance of a country since different electoral rules generate different outcome patterns even with no change in the identity of candidates. The two most common electoral schemes are proportional representation and plurality. The theoretical debate concerning these two systems is of intense interest not least because of the importance of finding a stable, democratic and representative institutional structure that can be employed worldwide. This topical book analyses the change of electoral rules in Italy from proportional representation toward plurality. While Italy is used as the illustrative case, the analysis has far-ranging theoretical and practical implications, and will therefore be of interest to academics and researchers of political economy, constitutionalism and public choice.

This unique collection of largely unpublished papers brings together the founding fathers of law and economics to provide their own views on the origins and intellectual history of the field. Law and economics emerged as a separate field of scholarship during the early 1960s, fueled by two seminal papers, one by Ronald Coase and one by Guido Calabresi. The ideas generated by scholars researching in the field have deeply influenced the major disciplines of economics and the law.These 16 essays (including three by Nobel Laureates in Economic Sciences) provide an impressive blend of differing experiences and varying perspectives, reflecting on the intellectual foundations of the field, its early struggles for recognition, and its remarkable advance during the last four decades of the twentieth century, and into the twenty-first. The essays clearly outline, and contribute new insights into, all of the central issues of this still vibrant research programme. A unifying theme of the book is the central importance attached by each scholar to scientific analysis, rather than to any particular ideology or dogma.This book provides an absorbing intellectual history of law and economics, and will be a fascinating read for academics and researchers with an interest in law and economics, the history of economic thought, public choice and public policy.

The welfare system in the United States underwent profound changes as a result of the groundbreaking welfare legislation passed in 1996 entitled The Personal Responsibility and Work Opportunities Reconciliation Act (PRWORA). The Political Economy of Welfare Reform in the United States examines in detail the legislative process that gave rise to PRWORA and presents two alternative theories to explain this process; the traditional public interest model of government and the public choice model. On the basis of a detailed historical analysis of welfare programs and policies in the US, the author explains the two alternative theories and engages in a detailed institutional and statistical analysis to make a convincing argument for the validity of the public choice paradigm.Mary Reintsma's book reveals how the outcome of any legislation is highly dependent on the input of interest groups and the interactions of such groups with those responsible for passing the legislation.The Political Economy of Welfare Reform in the United States will appeal to academics and researchers involved in public sector economics, public choice theory and welfare economics reform.

Global economic progress in the twentieth century, while generally encouraging, was neither continuous nor uniform. With the exception of some Asian nations, countries that were more developed at the beginning of the twentieth century still rank amongst the wealthiest nations, while countries that were poorer, still lag behind. The distinguished authors in this volume address the fundamental causes for such heterogeneous international experiences, placing particular emphasis on the role of institutions.They demonstrate how the study of economic development is increasingly linked to the development of institutions, which allow for more complex exchanges to occur in markets and societies. Institutions can be understood as rules or constraints that channel individuals' actions in specific directions, and can be formal or informal depending on their genesis. The book highlights the connection between institutions and economic welfare by examining countries at different stages of development. Although the authors' study material effects, they also look at individual well-being which is more strongly influenced by the non-material products of institutions such as opportunity, freedom and relationships. They move on to highlight the role of institutions in global business, in terms of innovation, entrepreneurship and foreign direct investment. In the concluding chapters they focus on the actual process of transition from one institutional framework to another. Amongst other examples, they examine reforms to international financial institutions and constitutional adjustments in transition countries. This varied yet highly topical book will be invaluable to institutional and public-choice economists, students and researchers of the theory and policy of international business, and social and political scientists interested in the role and evolution of institutions.

This book presents simple models of the major alternative types of political regimes, estimates of the parameters of these models, and quantitative estimates of the fiscal choices and economic outcomes of these regimes.William Niskanen provides valuable analysis of the effects of the voting rule, the progressivity of the tax structure, and the length of the fiscal horizon in democratic governments and interesting insights of the effects of alternative regimes on policies, such as war and immigration, that affect the number of people subject to the regime. Economists and political scientists who specialize in public finance, public choice, and the comparative analysis of political regimes will find much to engage them in this book.

Gordon Tullock, eminent political economist and one of the founders of public choice, offers this new and fascinating look at how governments and externalities are linked. Economists frequently justify government as dealing with externalities, defined as benefits or costs that are generated as the result of an economic activity, but that do not accrue directly to those involved in the activity. In this original work, Gordon Tullock posits that government can also create externalities. In doing so, he looks at governmental activity that internalizes such externalities. Monarchical governments originally introduced, for the benefit of the monarch rather than to eliminate externalities, many standard government activities such as road building, war, and internal policing. Most modern governments spend more money on redistribution than on more traditional government activities. This can be thought of as another effort to reduce externalities, since suffering in the community imposes externalities on the rest of us. Rent seeking, a relatively new field in economics and political science, is closely related to externalities and to the structure of government. An analysis of rent seeking, as well as some suggestions for improving government structure, cap off this fascinating treatise.Economists and political scientists will find this lively and readable book both stimulating and provocative.

This book presents simple models of the major alternative types of political regimes, estimates of the parameters of these models, and quantitative estimates of the fiscal choices and economic outcomes of these regimes.William Niskanen provides valuable analysis of the effects of the voting rule, the progressivity of the tax structure, and the length of the fiscal horizon in democratic governments and interesting insights of the effects of alternative regimes on policies, such as war and immigration, that affect the number of people subject to the regime. Economists and political scientists who specialize in public finance, public choice, and the comparative analysis of political regimes will find much to engage them in this book.

This unique collection of largely unpublished papers brings together the founding fathers of law and economics to provide their own views on the origins and intellectual history of the field. Law and economics emerged as a separate field of scholarship during the early 1960s, fueled by two seminal papers, one by Ronald Coase and one by Guido Calabresi. The ideas generated by scholars researching in the field have deeply influenced the major disciplines of economics and the law.These 16 essays (including three by Nobel Laureates in Economic Sciences) provide an impressive blend of differing experiences and varying perspectives, reflecting on the intellectual foundations of the field, its early struggles for recognition, and its remarkable advance during the last four decades of the twentieth century, and into the twenty-first. The essays clearly outline, and contribute new insights into, all of the central issues of this still vibrant research programme. A unifying theme of the book is the central importance attached by each scholar to scientific analysis, rather than to any particular ideology or dogma.This book provides an absorbing intellectual history of law and economics, and will be a fascinating read for academics and researchers with an interest in law and economics, the history of economic thought, public choice and public policy.

This unique book uses a transaction cost perspective to illustrate how hierarchies influenced the structure of markets and behaviour of individual businesses and cartels in pre-revolutionary, Soviet and present-day Russia. Ekaterina Brancato exposes the devastating effects of self-interested decision-making of government officials on economic growth, and highlights the inefficiencies of the legal system in Russia. She demonstrates that throughout Russian history considerable state involvement in the economy has meant that some markets were highly regulated; for most of the 20th century, open markets were suppressed by the political regime, and entrepreneurial success has been dependent on networking. The general population, the author argues, has exhibited an inadequate propensity to self-govern. In addition, the laws of contract and private property, crucial for development of markets, have been ineffective. The book concludes that, consequently, the cost of market transactions has been high and the cost of social networking through hierarchies relatively low.This book will strongly appeal to academics and students specializing in industrial organization, public choice, transition, entrepreneurship, social networks and cultural studies as well as Russian economic history and political economy. Business and management students focusing on transition economies will also find this book to be of particular interest.

Gordon Tullock, eminent political economist and one of the founders of public choice, offers this new and fascinating look at how governments and externalities are linked. Economists frequently justify government as dealing with externalities, defined as benefits or costs that are generated as the result of an economic activity, but that do not accrue directly to those involved in the activity. In this original work, Gordon Tullock posits that government can also create externalities. In doing so, he looks at governmental activity that internalizes such externalities. Monarchical governments originally introduced, for the benefit of the monarch rather than to eliminate externalities, many standard government activities such as road building, war, and internal policing. Most modern governments spend more money on redistribution than on more traditional government activities. This can be thought of as another effort to reduce externalities, since suffering in the community imposes externalities on the rest of us. Rent seeking, a relatively new field in economics and political science, is closely related to externalities and to the structure of government. An analysis of rent seeking, as well as some suggestions for improving government structure, cap off this fascinating treatise.Economists and political scientists will find this lively and readable book both stimulating and provocative.

'They have built a dam across the rivers of justice and then they complain of the drought in the field below.' - With these stinging words W. Clarke Durrant III, then Chairman of the Legal Services Corporation, admonished the American Bar Association in 1987 for its use of monopoly prices to exclude less affluent Americans from access to civil justice.The Right to Justice reviews the history of legal services in the US from its origins in the 1890s to the multi-million dollar Federal program of the late 20th century. But this is no ordinary text. Charles Rowley skilfully shows how government transfers tend to be dissipated in competitive rent-seeking by special interest groups, that much of what is left tends to be subverted to the agendas of the more powerful groups and that the residuals tend to be inefficiently managed by a poorly monitored and ideologically motivated supply bureaucracy. The upshot is that customer preferences play little or no role in the allocation of resources within the legal services budget.In a veritable tour de force, Charles Rowley places the US Federal legal services program on the scholarly rack of public choice - which analyses individual behaviour in terms of universal self-seeking motivations in a political market. He offers a convincing unique explanation of the forces that have subverted a well meaning attempt to assist poor Americans into a co ordinated attack on the central institutions of the family, capitalism and of Madisonian Republicanism which together constitute the essence of the American dream.

Do public goods and services, such as streets, parks and dams have to be provided by government? In Public Goods and Private Communities, Fred Foldvary's innovative application of public choice and spatial theory to questions of urban economics and governance shows how collective goods can be provided by agents in a market process.Rejecting the market-failure hypothesis, Dr Foldvary argues that an entrepreneur can provide collective goods by consensual community agreements. Instead of focusing particular services, as previous studies have done, this book concerns itself with entire private communities. A series of case studies demonstrates how real world communities, such as Walt Disney World, the Reston Association in Virginia and the private neighbourhoods of St Louis, are in fact financing their own public goods and services in accordance with this theory. For such communities to rise and prosper, the author contends, government must eliminate restrictions such as zoning as well as the taxation of private services. After considering the implications of his work for urban economies - at a time when many of America's cities are plagued by decay, violence and poverty - Dr Foldvary argues that prosperity can be restored to cities if private communities are allowed to develop. As an original response to an urgent, contemporary problem this well-written book will be welcomed by social scientists, policy makers and business leaders seeking solutions to problems of urban decay.

Bureaucracy and Public Economics brings together in one volume the classic book and related articles which put forward the first formal economic theory of the behaviour of bureaucracies. William Niskanen Jr. has consistently argued that bureaucrats have personal objectives - that differ from those of both their political supervisors and the general public - which they further by use of their monopoly power. He develops his argument to contend that government budgets have become too large and should be curtailed. All of Professor Niskanen's major contributions to this field have been brought together in this one volume including his pioneering article on 'The Peculiar Economics of Bureaucracy', the full text of the book 'Bureaucracy and Representative Government' and his recent reassessment of the larger body of scholarship on the economics of bureaucracy.Scholars, students and teachers of public economics will welcome this volume which, by making some of the key contributions in the field more widely accessible, will provoke discussion, debate and further research.

Trade policy in the United States since 1930 is rigorously evaluated in this major new book. Using public choice analysis to identify and explain protectionist behavior, Charles K. Rowley, Willem Thorbecke and Richard E. Wagner demonstrate why unilateral free trade cannot be achieved through the normal political process and make a strong case for constitutional reform.Trade Protection in the United States analyzes the history of US trade policy to explain why interest groups are able to foster protectionist policies despite the advantages which free trade offers consumers. The authors also explain why the principles of managed trade - as epitomized in the institution of the GATT - are inevitably subverted by protectionism. This important book concludes with a vigorous justification of unilateral free trade and makes a convincing case for protecting the freedom to trade through an amendment to the US constitution.Applying recent developments in constitutional political economy to a key policy issue, this book will be welcomed by economists, political scientists and lawyers as a major statement of the right to trade.

In this important new book, Gordon Tullock, a founding father of the public choice school, provides a formal analysis of the foundations of decision making. Voting procedures are crucial to Western democratic governments but are also employed in dictatorial governments, private clubs, corporations and religious organizations. This comprehensive book examines the many techniques of voting and the different outcomes in different situations. Gordon Tullock's analysis begins by using a simple model in which individuals vote in terms of their own preferences. It is assumed that the voters are well informed, their preferences are reasonably firm and there are no trades or bargains made among voters. These assumptions are then relaxed in order to make the analysis more realistic. Special attention is given to Arrow's work and the idea that people do not always vote according to simple preferences. The author discusses the phenomenon of 'throwing a vote away' or the possibility of an individual voting against their preference if offered something in return. After considering strategic voting, situations where voters engage in trades between one another and the lack of perfect information, Gordon Tullock examines a voter's options and the idea that individuals may rank options in degrees of their preferred outcomes. He also explores the possibility of preferences changing over time, why some issues are put up to vote and others are not, and situations where individuals voting with the same preferences, but in different voting systems, result in different outcomes.On Voting expands present thinking in the Public Choice school and provides a forum for creating new paradigms in the school as well as changing the focus and scope of current studies. It encourages new research by suggesting areas where more work should be done. The book will be of special interest to political scientists as well as those interested in public policy and political economy.

Policy Analysis and Public Choice is an important selection of articles written by William A. Niskanen over the last thirty years. The volume represents two quite different disciplines to which Niskanen has made a major contribution: policy analysis and public choice. It also includes his major essays on proprietary studies as well as many of his professional papers written for an academic audience.Part I details Niskanen's important contribution to policy analysis. The diverse topics discussed include: defence spending and resource allocation, trade policy, crime and drug policy, and welfare and the culture of poverty. Part II is concerned with public choice and political economy, in particular the liberal economic order, bureaucracy, democratic government and progressive taxation. The volume also includes an autobiographical summary focusing on the complementary nature of his work on policy analysis and public choice, and a number of commentaries that reflect Niskanen's unique professional background and perspective. Policy Analysis and Public Choice will be of special interest to those interested in public choice, public policy, political economy and political science.

This volume offers a selection of the works of one of the most persuasive and sophisticated theorists of the free economy and the free society, Arthur Asher Shenfield.Arthur Asher Shenfield was a classical liberal and an astute critic of misguided government intervention in a free economy. He produced sophisticated refutations of both full-blooded socialism and the milder varieties of collectivism and welfarism pioneered in Scandinavia and Western Europe. He was a keen observer of American affairs and included here is a selection of his essays on constitutionalism and law in the United States. These essays trace the decline in legal protection that America has given economic agents and examine the rise of socialist influences in the American judiciary system. Shenfield also offers a robust account of the legal and economic effect of US and European anti-trust law, as well as discussing the adverse effect on economic efficiency caused by trade unions.In these essays, Arthur Asher Shenfield has made the law and economics of a free society accessible to businessmen and policymakers as well as to scholars and students of classical liberal philosophy and law.

The Political Economy of the New Deal explores the political and economic forces that shaped the highly uneven distribution of federal emergency relief spending during the Great Depression. It presents new empirical evidence on the Roosevelt administration's response to the Great Depression, and shows how this was influenced more by presidential politics than by the plight of the unemployed millions. The authors apply public choice theory to data produced by the Roosevelt administration to produce an empirical model of New Deal spending decisions. It reassesses the role played by politics in shaping the policies adopted by the New Dealers through a detailed analysis of the distribution of federal emergency relief funds. The authors present new econometric evidence supporting the idea that President Roosevelt used the New Deal to buy electoral votes. They suggest that states with healthier economies attracted disproportionately larger shares of the federal government's relief funds simply because they could afford the programs' costs; and that states whose citizens were in greatest economic need were required to bear more of the cost of financing projects. The results from this analysis suggest that while economic need was certainly not ignored, political considerations dominated the distribution of New Deal dollars.This book examines the origins of the modern American welfare state from a public choice perspective and will be of great interest to economists and political scientists, as well as those interested in the economic history of the United States.