Constitutional Democracy

Citation

Pyne, D. (2002), "Constitutional Democracy", International Journal of Social Economics, Vol. 29 No. 5, pp. 428-431. https://doi.org/10.1108/ijse.2002.29.5.428.2

This is a provocative book that will be of interest to anyone with an interest in public choice theory in general or constitutional economics in particular. It is very non‐technical and will be easily understood by those without a background in either economics or public choice theory. Nevertheless, there is much here that will also be of interest to specialists.

Readers familiar with other books Mueller has written or edited on public choice theory (e.g. Public Choice II and Perspectives on Public Choice: A Handbook) will not be disappointed with the quality. Nonetheless, the intention and orientation of Constitutional Democracy is different. His previous books were positive in orientation and provided surveys of the field. However, this book is much more normative in orientation. It attempts to discuss the properties of a “good” constitution and how the process of creating it should take place. Like his other books, this one is comprehensive. It is hard to think of any issue associated with constitutional economics that is not at least mentioned. As it is not possible to discuss them all here, this review will concentrate on a few highlights.

The book starts with a discussion of the shortcomings of the outcomes of current political processes in the USA and several other countries. It argues that better constitutions would result in better political outcomes. It rejects constitutions such as those in countries like Britain and New Zealand that are not written or those that are written by incumbent governments concerned with their future electoral prospects. Mueller is a strong advocate of the people writing their own constitution:

To trust someone else to write the rules, or to wait for history blindly to evolve them, is to profess an even more naïve optimism than to think that the individual members of a society could write the rules for themselves (p. 346).

As a public choice theorist, Mueller clearly recognizes that people engaged in political activities will behave in a self‐interested fashion. Indeed, he assumes that people will behave in a rational, self‐interested fashion after the constitution has been written. Much of his discussion is on how the constitution can minimize the negative effects of this behaviour. Nonetheless, he feels that when citizens write a constitution they can put themselves behind a Rawlsian veil of ignorance as to their future position in society or, if that is too big of a leap, at least feel that they should “imagine” that they occupy all future positions in the polity. Many economists will be sceptical of people’s ability to do this. Nevertheless, Mueller makes very good arguments which should give even the most hardcore neoclassical economist pause to consider the possibility. Indeed, if this is not possible, the provisions that a good constitution should contain become an academic subject.

A particularly timely application of his assumption of citizens placing themselves behind a Rawlsian veil of ignorance when writing a constitution is when they consider provisions granting the right of speedy and public trials even for members of minority groups considered more prone to terrorism. As he states:

If citizens at the constitutional stage are uncertain whether they might someday be a member of a group that would be held without being brought to trial, they might unanimously agree that everyone who is arrested should have the right to be charged with a specific crime and brought “to a speedy and public trial by an impartial jury” (p. 215).

Questions could be raised as to how realistic it is to expect citizens to come to such unanimous agreements.

Every reader is likely to find some of the proposals radical. Which ones they find most radical will, in part, depend on the political system they are most familiar with. Most readers outside of Switzerland will find his proposal of direct democracy for certain local issues to be radical. In addition, he has strong arguments against the type of geographical representation that is common in many countries. His preferred alternatives are either proportional representation or a “two‐party system.” By a two‐party system, Mueller envisions the entire nation being one political district and, as is the case with proportional representation, each party puts forth lists of candidates. However, unlike proportional representation, there are run‐off elections until only two parties are represented in parliament.

Mueller discuses several alternatives for a parliamentary voting rule. In particular, he argues for the merits of either voting by veto, point voting or probabilistic voting procedures. Public choice specialists have known the benefits of these procedures for some time. Indeed, voting by veto can be credited to Mueller himself. However, it is questionable how the public would respond to such non‐traditional voting schemes. In particular, one wonders how they would respond to a mechanism such as probabilistic voting that could have random outcomes. Despite the strong case he makes, he seems to recognize this and later in the book he often refers to qualified majority voting rules instead. He makes a strong case for the use of qualified majority voting rules (i.e. some percentage greater than 50 per cent being required for proposals to pass) rather than a simple majority voting rule, especially when issues involving redistribution are concerned.

Other topics that Mueller deals with include bicameralism, which he is against. He also argues in favour of the possibility of including certain economic rights in the constitution such as unemployment insurance or a social safety net administered by a body independent of the legislature. The later is actually an innovative proposal to reduce the possibility of the legislature having to deal with redistributional issues.

Given the comprehensive and normative coverage of the subject matter, any thoughtful reader will find material that he takes issue with. However, it is presented in such a well‐argued fashion that it will hopefully cause the reader to re‐examine his positions. One aspect that this reviewer found questionable was the detailed nature of the constitution Mueller envisions. It is not always clear that he takes into account the general equilibrium effects of some of the provisions he advocates. For example, he points out that tariffs and quotas are the result of rent‐seeking activities and cause significant economic damage. He proposes that a constitution could address this by requiring a supramajority greater than that for normal legislation for such measures to pass. However, one might question whether this might just redirect these rent‐seeking activities to ones that are even more harmful. For example, in the past, both Canada and the USA have used the threat of rigorous customs inspections slowing imports to a crawl to persuade Japan to adopt “voluntary” export restrictions. “Voluntary” export restrictions are known to be more harmful to the home country than either tariffs or quotas. Given that custom inspections can also have clear public good aspects (Mueller sees the provision of public goods as a key function for government), one would wonder how a constitution could be drafted so finely as to include beneficial customs inspections but not harmful ones. Even if this were possible, one has to ask if it would not simply divert rent‐seeking activities to other, even more harmful, outlets. Mueller is undoubtedly aware of this issue, as there is an established public choice literature on it. It would have been beneficial if Mueller had explicitly addressed it.

In summary, despite some minor qualifications, this book makes an important contribution to the constitutional economics literature. It is strongly recommended.