Zane Spindler

Freedom and growth: Do constitutions matter?

This paper uses an augmented Solow model, with cross section data, to measure the effect on per-capita income of a) the entrenchment of various rights in a countrys constitution and b) the level of economic freedom in a country, broadly construed. The results suggest that entrenchment,per se, of any single right seldom has a significant general economic effect, while the effect of economic freedom is significant and substantial. The paper then considers whether such evidence could support the proposition that “constitutions do not matter.” While it concludes otherwise, it does caution against incurring excessive negotiation costs to obtain entrenchment of a comprehensive “wish list” of rights.

Liberty and development: A further empirical perspective

This paper uses the Wright ratings of economic freedom to investigate the relationship between economic freedom and economic development for most countries in the world. This relationship is apparently strong and direct for such economic freedoms as freedom of property and freedom of movement but inverse for freedom of association. These findings appear to be independent of the type of economic system or civil liberties, as measured by the Gastil ratings, which have their own important effects on economic development.

Constitutional design for a rent-seeking society: Voting rule choice

If rent-seeking costs are considered in addition to, and separate from, external costs and decision costs in Buchanan and Tullocks economic theory of constitutions, total interdependence costs may have multiple local minima close to the decision-making extremes. As a result, the global minimum, which gives the optimal decision rule, may be much closer to “unanimity rule” or “individual rule” than to “simple majority rule”. Further, the comparison of the minimum total interdependence costs for the public sector with those for the private sector would only justify a smaller scope and size for the public sector than would be the case if rent-seeking costs were ignored. Finally, systematic variation in rent-seeking cost could account for dramatic regime shifts between dictatorship and democracy.

Constitutional Design for a Rent Seeking Society: The Voting Rule Choice Revisited

Buchanan and Tullocks original trade-off model of constitutional design is used to analyze how constitutional design affects post-constitutional rent seeking, and, in turn, how the anticipation of post-constitution rent seeking should lead to modification of constitutional design — specifically with respect to imposing and maintaining effective (composite) supermajority decision rules.

Squatting as a transition problem in South Africa

This paper applies principles of transition to land tenure and squatting in South Africa. Political transition in South Africa reassigned political property rights, thereby contriving contestable, rentseeking incentives for squatting as a means to privatise land and redistribute wealth. Government failure to establish and protect private property rights in a squatter camp resulted in common-pool problems that resisted private and public resolution with consequent rent dissipation and social loss. In response to this retreat from duty, informal agents emerged to claim their own share of the prize. Without enforceable rules of capture, the growth of squatter camps in South Africa will continue.

The public choice of "superior" sanctions*

This paper analyzes the public choice of specific forms of sanctions. Current sanctions are essentially quantity constraints (“Q-sanctions”) which are like quotas in that they might bestow benefits on certain special interest groups in the target country. Revenue sanctions (“Rsanctions”) may be able to recapture such benefits in the form of sender government revenue which could either compensate for the costs of sanctions to the sending country or finance other sanction enhancing activities aimed at the target country. Hence, R-sanctions may be “superior” to Q-Sanctions in general or on the basis of “target efficiency”. However, public choice analysis suggests that Q-sanctions will generally be chosen over R-sanctions by democratic countries.

The overstated economy: Implications of positive public economics for national accounting

AbstractCurrent national income accounting, which is based on the ‘comprehensive production concept’, is criticized on the basis of the ‘modern transfer’ view of government activity, which is based on a positive theory of bureaucracy and representative government, and is shown as ‘overstating’ the size of the national economy. Such mismeasurement inevitably leads to misunderstanding the macroeconomic effects of nationalization, redistribution and stabilization policies. An alternative concept, the ‘restricted market production concept’, is shown as providing a consistent and economically meaningful measurement of the size of the national economy and of the relevant effects of various government policies. qu]The underlying assumption is that [government] services are worth their costs, i.e., that they are produced and supplied after a proper balancing by the authorities (or the electorate itself on given occasions) of their social advantages and social cost. [A footnote continues!] This assumption may be correct in societies that are well governed but would be incorrect in those that are not.Paul Studinsk; The Income of Nations, 1961(bracketed words added)

Endogenous bargaining power and the theory of small group collective choice

ConclusionContrary to some criticism (Musgrave and Musgrave, and West) the small group collective choice model may yield a determinate, Pareto optimal solution even with all or none bargaining. Such bargaining as well as the solution are implied by the basic assumptions of the theoretical model.

Squatting as Rent-seeking and Pressure-group Competition: A South African Case-Study

A new squatting phenomenon in South Africa is analysed from a rent-seeking, pressure-group perspective. While such squatting may play an expanded role in privatising publicly- and even privately-held land and in redistributing wealth over the near future, in the longer term its expansion will tend to be limited by rent-protecting and counter-innovation as long as this rent-seeking competition stays within the bounds set by constitutional government.

A rent-seeking perspective on privatization

Abstract This paper considers the recent wave of privatization activity as a consequence of rent-seeking among competing special-interest or pressure groups. The dynamic interaction of interest groups through a political system generates repetitive, irregular waves or cycles of rent-creation, rent-transfer and, ultimately, rent-dissipation as the essence of the political process that determines transitory political outcomes (legislation, administrative decisions, as judicial interpretations). This perspective is used as a framework for speculation about the general and county-specific determinants of the worldwide upswing in privatization activity and the differences in privitization experiences of countries such as Canada and the United Kingdom.