Autocratic, Democratic, and Optimal Government

Autocratic, Democratic, and Optimal Government

Fiscal Choices and Economic Outcomes

The Locke Institute series

William A. Niskanen

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.

Chapter 1: On the Choice of Regime

William A. Niskanen

Subjects: economics and finance, public choice theory, politics and public policy, public choice


regime . . . a system of rule or government1 Most people, of course, never make a choice among political regimes, except for the implicit choice not to migrate to an area ruled by a different regime. The populations ruled by some types of regimes, however, prosper and grow relative to those ruled by other regimes, and some people find a way to move to a preferred regime. And regimes change – sometimes by conquest, sometimes by evolution, sometimes by choice. As a contribution to help understand these important historical conditions and developments, this book develops a theory of the fiscal choices and economic outcomes of the major alternative types of political regimes. Autocracy is the first type of regime addressed, because most people throughout recorded history have been subject to some form of autocratic regime. The primary focus is on the rules of democratic regimes, because democracy is now the dominant type of regime and the one broadly considered to be the best achievable. At the end of 2000, for example, the annual Freedom House survey identified 63 percent of the world’s states as democracies and estimated that 41 percent of the world’s population live in free states.2 And the several types of actual regimes are compared with an optimal government, one based on the set of rules that people might choose “behind the veil of ignorance”3 about their personal conditions and preferences. The theory addresses the following types of questions for each of the several major types of political...

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