Charlotte Twight

On the Efficiency of Law: A Public Choice Perspective

Economists have not yet developed a comprehensive theoretical framework, incorporating transaction-cost economics within a public choice perspective, for predicting when there will be an efficiency problem with the law. Transaction-cost reasoning and the rent-seeking insight have not been applied systematically in a dynamic institutional context to evaluate when the law will be used to increase (or not minimize) problems of bounded rationality and opportunism. This paper takes a first step at identifying and remedying this deficiency. The paper first provides a critical review of relevant theoretical contributions made by Becker (1983, 1985), Posner (1977), Priest (1977), Rubin (1977, 1982), Williamson (1975, 1985), and others. We then show how analysis of the efficiency of law can be synthesized into a broader whole by incorporating transaction-cost economics more fully into existing understanding of rentseeking in the political realm. Thus, within the public choice paradigm, this paper develops a deeper transaction-cost analysis of the efficiency of law. Building on prior research by the authors (Crew and Rowley, 1988a, 1988b; Twight, 1983, 1988), the paper identifies variables that position legal rules on a spectrum that ranges from those that are predominantly transaction-cost

Political Transaction-Cost Manipulation An Integrating Theory

This article shows linkages between a broadened transaction-cost theory of politics and prior studies analyzing governmental behavior such as agenda control, strategic use of information, cost concealment and cost dispersion. It develops a model of government manipulation of politically relevant transaction costs in order to facilitate both more comprehensive specification of the determinants of such political behavior and more accurate assessment of the likelihood and consequences of institutional change. The article presents a taxonomy that classifies conceptually various observed and potential forms of governmental transaction-cost manipulation.

Political Transaction-Cost Manipulation

This article shows linkages between a broadened transaction-cost theory of politics and prior studies analyzing governmental behavior such as agenda control, strategic use of information, cost concealment and cost dispersion. It develops a model of government manipulation of politically relevant transaction costs in order to facilitate both more comprehensive specification of the determinants of such political behavior and more accurate assessment of the likelihood and consequences of institutional change. The article presents a taxonomy that classifies conceptually various observed and potential forms of governmental transaction-cost manipulation.

What Congressmen Knew and When They Knew It: Further Evidence on the Origins of U.S. Broadcasting Regulation

This paper presents richer contemporaneous evidence of Congresss role in the passage of the Radio Act of 1927, the act which established the basic statutory framework that still governs federal regulation of broadcasting in the United States. Recent analysis finding the courts decision in Tribune Co. v. Oak Leaves Broadcasting Station to have been the cause of Congresss action on the radio bill is shown to rest on an inaccurate chronology of congressional decisionmaking. More closely examining the actions of legislators upon whose votes passage of the radio act depended, this paper contributes new evidence of strategic orchestration surrounding the perceived “chaos of the airwaves” that stimulated broadcasting regulation. Original congressional documents show that, in a political context characterized by costly information, intra-congressional manipulation of information costs was an important factor in the adoption of the Radio Act of 1927. Personal ties between executive branch officials are shown to have spawned a key legal opinion that prompted passage of the radio bill.

Federal control over education: Crisis, deception, and institutional change

Abstract This paper analyzes the emergence of two key statutes which first established comprehensive federal controls over education in the United States, the National Defense Education Act of 1958 and the Elementary and Secondary Education Act of 1965. The U.S. experience in establishing federal control over education is examined against a model of institutional change grounded in the economics of political transaction-cost manipulation. Detailed examination of relevant congressional documents shows the roles of real and feigned crisis and of deliberate deception in effecting acceptance of federal control over education.

Urban Amenities, Demand Revelation, and the Free-Rider Problem: A Partial Solution

This paper suggests a practical mechanism to mitigate problems of demand revelation and free riding that arise when efforts are made to create urban amenities such as parks or nature preserves through voluntary private purchase. Building on the work of earlier writers, the model provides a potential way to increase voluntary donations for local public goods, holding constant the incentive to free ride, while simultaneously introducing a mechanism — the refundable trust — that reduces the incentive to free ride. A case involving implementation of this mechanism is described.