I am currently engaged in a range of research projects. I list several of the main ones here.
- (1) “Adam Smith’s Political Science.” This project seeks to combine modern methods from positive political theory with existing approaches to Smith’s work. Although economists claim Smith as the father of economics, they typically do so by picking his economics out of his larger project of an integrated understanding human behavior that sought to understand conflict and cooperation in three realms: economic, political, and social settings.
The purpose of the project is threefold: (i) to suggest the nature of Smith’s integrated approach to conflict and cooperation across the three realms of human behavior; (ii) to develop new insights into Smith’s treatment of specific topics; and (iii) to explore ideas in Smith’s work that provide new insights into modern theories.
Specific topics include:
- The political-economics of development, including the historic development of Europe;
- the theory of the state, including jurisprudence, justice, law, and government;
- Smith’s ubiquitous use of equilibrium and comparative static arguments, providing both a consistent approach to a wide range of human behavior, including social, political, as well as economic;
- how the Catholic Church sustained its monopoly during the middle ages, and how it lost that monopoly in the Reformation;
- the economics and politics of slavery, including its stability around the world and its abolition in Western Europe;
- the implications of North, Wallis, and Weingast’s Violence and Social Orders (2009) approach to the “natural state” for Smith’s theories of mercantilism and the role of the state;
- the role of violence;
- how morality is sustained;
- the origins of language;
- the American Revolution or, in Smith’s terms, the “contest with America,” including his novel views about how to resolve this contest;
- and his normative political theory.
I demonstrate a methodological unity to Smith’s work based on his use of equilibrium and comparative static arguments in all these topics. This unity suggests some elements of the contents of Smith’s missing second book on jurisprudence, promised in every edition of The Theory of Moral Sentiments, published in the years from 1759 to 1790, the last year of Smith’s life.
Working Papers in Progress:
— “Deriving ‘General Principles’ in Adam Smith: The Ubiquity of Equilibrium and Comparative Statics Analysis throughout His Works” (with Glory Liu). DOWNLOAD HERE
— “From ‘The Lowest State of Poverty and Barbarism’ to the Opulent Commercial Society: Adam Smith’s Theory of Violence and the Political Economics of Development.” DOWNLOAD HERE
— “Adam Smith’s Theory of Slavery and its Abolition in Western Europe.” DOWNLOAD HERE
— “Smith on the Industrial Organization of Religion: The Medieval Church’s Monopoly and its Breakdown in the Reformation.” (Coming soon.)
- (2) “Violence Trap” (with Gary W. Cox and Douglass C. North). This project seeks a deeper theoretical foundation for the conceptual framework developed in Violence and Social Orders: A Conceptual Framework For Interpreting Recorded Human History (with Douglass C. North and John Joseph Wallis, 2009).
The main purpose of this project is twofold: First, to specify the logic underlying the impediments to development; and second, to provide a new explanation as to why a small number of countries have escaped those impediments to become developed.
With respect to the first, we demonstrate the surprising prevalence of violence internal to developing countries. Put simply violence, including the implicit threat of violence, is a common margin of economic and political competition in the developing world.
Yet existing approaches to development fail to incorporate violence in a systematic way. They therefore miss an essential aspect of the development problem. Because violence is both prevalent and costly, developing countries organize themselves to limit violence. They do so through the political manipulation of the economy; that is, by creating and targeting rents so as to give those with violence potential a stake in cooperation rather than fighting. Unfortunately, this form of political and economic organization hinders long-term economic growth.
Why cannot countries simply adopt good political institutions, including secure property rights, to secure better long-term growth? We answer that actors are willing to bear the costs of such reforms only if they believe the new institutions will be stable; absent stability, the benefits of reform will not be realized. We argue that good political institutions can be stable only if the economy is sufficiently specialized and integrated, so that all actors perceive the economic costs of domestic violence to be prohibitive. If this condition fails, then those with a comparative advantage in violence will credibly demand rents—thus requiring ‘bad’ political institutions. Yet high levels of specialization and integration are hard to achieve under bad institutions because the presence of violence means that the investments necessary for economic integration are too risky and therefore fail to occur. Thus, developing countries face a politico-economic development trap: the economy cannot develop unless political institutions are good; but implementing good political institutions will not be worth the cost unless they will foreseeably last, which requires that the economy be sufficiently developed. We call this the violence trap both because countries experience endemic violence while in the trap and because it is the effort to solve the problem of violence that leads countries to ‘bad’ political institutions and, hence, poverty.
The violence trap suggests a fundamental tradeoff between security and economic growth. It represents a new way of understanding the impediments to development. Existing approaches interpret rents as “directly unproductive profit-seeking” activities (Bhagwati 1982; see also Buchanan, Tollison, and Tullock 1980). This perspective provides considerable insights into policymaking, especially in the developed world. But in the developing world, this perspective misses how rent-creation and distribution to the powerful are not simply a costly means of redistribution but an important means of maintaining peace and political order.
This approach has important implications for economic reform. The current approach to economic reform is flawed because it fails to consider the margin of violence. In our terms, reform that focuses largely on reducing rends and opening access to firms and competitive will not achieve its goals. Instead, it risks undoing the mechanisms that suppress violence; developing countries rationally resist this approach to reform.
Our current work focuses on “The Escape from the Violence Trap”; that is, how a small number of countries in history and modern times have managed to break out of the violence trap.
Several podcasts and lectures on this topic may be found HERE.
- (3) “What is Law?” A series of papers with Gillian Hadfield investigating the nature and stability of law. Most definitions of law by economists and political scientists assume state coercion and do not differentiate law from other forms of sovereign command. Our approach differs on both these dimensions. First, we disassociate the definition of law from the enforcement mechanism. Second, we differentiate law from other forms of sovereign command.
The what-is-law perspective interprets law as a the solution to a coordination problem. Most transactions take place without much likelihood that they will end up in court, even if the transaction goes badly. Nonetheless, law helps structure these transactions by creating a set of expectations that govern the relations.
We characterize law as a set of common knowledge rules with three characteristics: (i) they partition actions into legal/ illegal; (ii) they satisfy a series of legal attributes, such as generality, prospectivity, feasibility, consistency, publicity, universality, etc.; and (iii) there exists a legal steward responsible for reducing ambiguities and dealing with new or unforeseen circumstances. These three characteristics separate law from other forms of sovereign command. In this view, people interact within the shadow of the law, not because of state coercion, but because the law serves as an equilibrium solution to a complex coordination function.
Using a game theoretic perspective, we show how law may emerge from the decentralized coordination of individuals without state coercion.
Focusing on modern developed states, the first paper in the series on which the others build is:
— “What is Law? A Coordination Model of the Characteristics of Legal Order” Journal of Legal Analysis. (2012) 4(1): 1-44.
We apply this perspective to a series of contexts, including: Constitutional law:
— “Constitutions as Coordinating Devices” in Sebastian Galiani and Itai Sened, eds., Institutions, Property Rights, and Economic Growth: The Legacy of Douglass North. (Cambridge: Cambridge University Press, 2014.) DOWNLOAD HERE.
— A series of contexts prior to the development of a modern state, such as Medieval Iceland, medieval merchants, and the California gold fields prior to the organization of the California territorial or state government: “Law without the State: Legal Attributes and the Coordination of Decentralized Collective Punishment“ Journal of Law and Courts 1(1) (February 2013): 1-32.
— “Building Legal Order in Ancient Athens” (with Federica Carugati and Gillian Hadfield), Journal of Legal Analysis (forthcoming). This paper contributes to the debate about whether the Athenian legal system produced law. We argue that it did (with some qualification). DOWNLOAD HERE.
Finally, our recent survey of the “Microfoundations of the Rule of Law” (Annual Review of Political Science) also builds on “What is Law?” It is available: DOWNLOAD HERE.
- (4) Perhaps a McNollgast book on a “Restatement of Public Law”? In this project, we seek to use positive political theory and the law to provide a new and consistent approach to public law that integrates law, economics, and politics. Prospective topics include constitutional law, statutory interpretation, and administrative law and regulation.
(5) A multifaceted normative and positive political theory (NPPT) program with Josiah Ober in three interrelated parts. The first part involves normative and positive political theory. NPPT models are at once positive and normative. An example is a positive model that demonstrates how a given normative principle can be sustained under particular circumstances. Our current research involves several NPPT applications.
The second part involves ancient history, using positive political theory (PPT) and NPPT models to study various phenomena in the ancient world, such as a why did the oligarchies in both ancient Athens and Sparta decide to share power more widely, albeit in different ways and to different degrees? How, and in what ways, did these ancient societies sustained forms of equality among citizens?
The first paper in this project : “Is Development Uniquely Modern? Athens on the Doorstep,” is available: DOWNLOAD HERE. This paper combines the approached developed in North, Wallis and Weingast (2009) and Ober (2008) to demonstrate that ancient Athens was a developed polity, at least one that met the doorstep conditions of rule of law for citizens, perpetual institutions, and control of violence.
A second paper in this project, “Development and Political Theory in Classical Athens” (with Federica Carugati and Josiah Ober), is available: DOWNLOAD HERE. This paper is forthcoming in Polis.
Recent work has focused on the emergence of Greek political thought as a response to Athenian democracy. But, in addition to its political breakthrough to democracy, Athens underwent a profound social and legal transformation in the classical period. Without understanding this larger transformation we cannot adequately explain the development of Greek political thought. Between the late 6th and 4th centuries BC, Athens transitioned from an undeveloped, limited access, ‘natural state’ toward a developed open access society – a society characterized by impersonal, perpetual and inclusive political, economic, legal and social institutions that protected individual rights and sustained the polis’ exceptional growth
Some of those who witnessed this transformation first-hand attempted to grapple, often critically, with its implications for politics, social relations, and moral psychology. We show that Thucydides, Plato, and other Greek political thinkers devoted a considerable part of their work to analyzing the polis’ tendency toward political but also economic, social, and legal inclusion. Such a tendency, as many of them recognized, made Athens stand out among other Greek poleis, despite the fact that Athens was a democracy, not because of it. Democracy, therefore, is not the only explanatory variable in these accounts.
The third part of the program involves an NPPT approach to the evolution of political theory in the early modern Atlantic, roughly from Hobbes to Madison, also including Harrington, Locke, Hume, Montesquieu, and Adam Smith. These theorists lived in a much nastier world than we do, confronting problems of development and violence along with endemic problems of social organization. Their states were not the relatively peaceful, developed countries of the contemporary first world. Early modern states were characterized by privileges instead of rights; these states lacked rule of law and modern perpetual institutions; and they had too few limits on what we now call executive moral hazard. Politics was very high stakes; changes in leadership were often violent and accompanied by major changes in the rules.
We use modern PPT models to interpret both the positive and normative claims of early modern theorists, showing that these theorists understood many of the incentive problems facing their states, the sovereign (qua executive) in particular. More importantly, many of these theorists’ normative approaches represented solutions to the problems they analyzed in their positive models. Many of these normative proposals employed mechanisms discussed in the modern literature under the rubric of self-enforcing constitutions – polities in which political officials have rational, as well as moral, reasons to honor constitutional prescriptions.
- (6) “Positive Models of Public Goods Provision.” This project, with Kenneth Shepsle, focuses on the positive side of a traditionally normative question, namely, how do public goods get provided in practice? Models of legislative provision of goods and services either focus on rent-seeking (Buchanan, Tollison and Tullock 1980) or the national provision of local public goods (Inman 1988, Knight 2004, Weingast, Shepsle and Johnsen 1981). Both approaches emphasize inefficient provision.
In recent years, a new literature has emerged studying the question of public goods provision. Using models of majority rule Besley and Coate (2003) and Lockwood (2002, 2008) show that, depending on the skew of the distribution of preferences, public goods will be over- or under-provided, but virtually never at the efficient level. In essence, these models assume political decisions are made by citizen referendum, focusing the effects of variations in the demand side of public goods provision.
Our approach complements the existing literature. We study positive issues of public goods provision in more complex and realistic political settings; namely, those with representative legislatures that dominate national public goods provision in the developed world. In a paper tentatively titled, “The Positive Theory of National Public Goods Provision,” we demonstrate the central importance of agenda institutions within the legislature; that is, the institutional rules that determine who can bring forward a proposal and when. We show that, in modern parliamentary systems and in the U.S. House of Representatives, party control of the agenda biases outcomes away from the median in favor of those represented in the party.
- (7) Violence, Labor, and American Political Development” (with Margaret Levi). We use labor politics as a lens into American political development. Open access to business organizations in the form of general incorporation laws occurred in the United States in the 1840s and 1850s. In contrast, open access to labor organizations occurred only in the 1930s. The United States experienced considerable violent suppression of labor by the state prior to his time.This project focuses on two related themes about labor and violence:
- (i) The role of violence by and toward labor, both of which went far into the 20th century;
- (ii) The role of the New Deal legislation in committing both sides to eschew violence.
We suggest, tentatively, that open access took much longer for labor than business organizations because the commitment problems associated with violence were difficult to solve. An important and largely unrecognized feature of the New Deal labor legislation is that it helped solve the problem of violence associated with labor.
Seen from this perspective, Americans struggled with central development issues well into the 20th century. This perspective also suggests that the New Deal labor legislation was not simply about rent-transfers from business and customers to labor but enhanced welfare by solving the problem of violence associated with labor.
The first paper in this project is entitled, “Ending a Century of Violent Labor Conflict: A New Perspective on Unionization and the National Labor Relations Act,” (with Margaret Levi, Tania Melo, and Frances Zlotnick), Working Paper, Hoover Institution, Stanford University, May 2015. It is available: DOWNLOAD HERE.
- (8) Credible commitments and Self-enforcing Constitutions and Democracy.This program is long-standing program – I’ve been working on it for nearly three decades. Most new constitutions, including democracies, fail, and in relative short order; relatively few last multiple generations.. In this project, I study the circumstances and features of constitutions that make for durability.My current work on this topic pursues several ideas.
(A) In the following paper, Sonia Mittal and I propose three conditions that make constitutions more likely to survive: the limit condition, which holds that all successful constitutions limit the stakes of politics. The reason is that powerful individuals and groups are less likely to take extra-constitutional action to protect themselves if the constitution does so; the consensus condition reflects the idea that, if citizens act in concert in the face of a possible constitutional transgression, they can force the government to back down or depose it. We argue that various forms of brightlines facilitate this reaction by making transgressions less ambiguous; and the adaptive efficiency condition is the ability to adapt to changing circumstances without falling into violence. We continue to pursue these ideas.See: “Self-Enforcing Constitutions: With An Application to Democratic Stability in America’s First Century” (with Sonia Mittal). Journal of Law, Economics, and Organization (2013) 29(2): 278-302.
Another project pursues the limit condition mentioned above. This paper studies constitutional stability in the face of violence. Specifically, it models the ability of some groups to use violent rather than constitutional means to pursue their goals. We show how violence constrains the nature of the constitution, typically embodied in countermajoritarian provisions that benefit those with access to violence.See: “Democratization and Countermajoritarian Institutions: The Role of Power and Constitutional Design In Self-Enforcing Democracy” (with Susan Alberts and Chris Warshaw), in Tom Ginsburg, ed., Comparative Constitutional Design. (New York: Cambridge University Press, 2012.)
(B) In a related project, “The Self-Stabilizing Constitution: The Role of the Takings Clause” (forthcoming, Northwestern University Law Review), Tonja Jacobi, Sonia Mittal, and I show that, in addition to their substantive implications, most clauses of the U.S. Constitution also play a direct role in helping to stabilize the Constitution. We apply this perspective to the takings clause. DOWNLOAD HERE.
(C) Published works in this program include:
— “Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in 17th Century England” (with Douglass C. North). Journal of Economic History. (December 1989) 49: 803-32.
— “Constitutions as Governance Structures: The Political Foundations of Secure Markets,” Journal of Institutional and Theoretical Economics. (1993) 149: 286-311.
— “The Political Foundations of Democracy and the Rule of Law.” American Political Science Review (June 1997) 91: 245-63.
— “Federalism as a Commitment to Preserving Market Incentives” (with Yingyi Qian), Journal of Economic Perspectives (Fall 1997) 11: 83-92.
— “Politics and Economics of Ethnic and Regional Conflict,” in Virginia Haufler, Karol Soltan, and Eric Uslaner, eds., Institutions and Social Order. (Ann Arbor: University of Michigan Press, 1998).
— “Political Stability and Civil War: Institutions, Commitment, and American Democracy,” in Analytic Narratives, Robert Bates, Avner Greif, Margaret Levi, Jean-Laurent Rosenthal, and Barry R. Weingast, eds. (Princeton: Princeton University Press, 1998).
— “Democratization and Countermajoritarian Institutions: The Role of Power and Constitutional Design In Self-Enforcing Democracy” (with Susan Alberts and Chris Warshaw), in Tom Ginsburg, ed., Comparative Constitutional Design. (New York: Cambridge University Press, 2012.)
— “Constructing Trust: The Politics and Economics of Ethnic and Regional Conflict,” in Virginia Haufler, Karol Soltan, and Eric Uslaner, eds., Institutions and Social Order. (Ann Arbor: University of Michigan Press, 1998).
— “Constructing Self-Enforcing Democracy in Spain,” Irwin Morris, Joe Oppenheimer, and Karol Soltan, eds., From Anarchy to Democracy. (Stanford: Stanford University Press, 2004).
— “Self-Enforcing Federalism,” (with Rui J.P. de Figueiredo, Jr.). Journal of Law, Economics, and Organization. (April, 2005) 21: 103-35.
— “The Constitutional Choices of 1787 and Their Consequences” (with Sonia Mittal and Jack N. Rakove), in Douglas Irwin and Richard Sylla, eds., Founding Choices: American Economic Policy in the 1790s. (Chicago: University of Chicago Press, 2011.)
- (9) Federalism. This is another long-standing project. My recent work on federalism falls into two categories.
(A) In the first category, my most recent work on federalism pursues “second generation fiscal federalism” (SGFF). First generation fiscal federalism (FGFF) is largely normative and assumes that public decisionmakers are benevolent maximizers of the social welfare (e.g., Musgrave 1959, Oates 1972, Rubinfeld 1987). SGFF builds on FGFF but assumes that public officials have goals induced by political institutions that often systematically diverge from maximizing citizen welfare (Oates 2005).My most recent paper on this theme is:”The Fiscal Interest Approach: The Design of Tax and Transfer Systems” (with Caroline Pöschl), in J.P. Faguet and Caroline Pöschl, eds., Is Decentralization Good for Development? Perspectives from Academics and Policy Makers. Oxford: Oxford University Press (forthcoming). This paper is available: DOWNLOAD HERE.
- Previous SGFF papers include:
- “Federalism as a Commitment to Preserving Market Incentives” (with Yingyi Qian), Journal of Economic Perspectives (Fall 1997) 11: 83-92.
- “Fiscal Federalism, Good Governance, and Economic Growth in Mexico.” (with Maite Careaga). Dani Rodrik, ed., In Search of Prosperity: Analytic Narratives on Economic Growth. (Princeton: Princeton University Press, 2003).
- “Second Generation Fiscal Federalism: The Implications of Fiscal Incentives” Journal of Urban Economics (May 2009) 65: 279-93.
- “Second Generation Fiscal Federalism: Political Aspects of Decentralization and Economic Development,” World Development (2013).
(B) The second category includes published work on market-preserving federalism and self-enforcing federalism, special topics in SGFF:
- “The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development.” Journal of Law, Economics, and Organization (Spring 1995) 11: 1-31.
- “Federalism, Chinese Style: The Political Basis for Economic Success in China” (with Gabriella Montinola and Yingyi Qian), World Politics (October, 1995) 48: 50-81.
- “Self-Enforcing Federalism,” (with Rui J.P. de Figueiredo, Jr.). Journal of Law, Economics, and Organization. (April, 2005) 21: 103-35.
- “Regional Decentralization and Fiscal Incentives: Federalism, Chinese Style,” (with Hehui Jin and Yingyi Qian) Journal of Public Economics 89 (2005): 1719-42.