New Thinking in Political Economy series
Edited by José Casas Pardo and Pedro Schwartz
Chapter 6: Democracy, Citizen Sovereignty and Constitutional Economics
Viktor J. Vanberg 1 INTRODUCTION This chapter is an exercise in conceptual clariﬁcation. Its purpose is to explore the contribution that constitutional economics can make to the theory of democracy. Constitutional economics as the economics of rules is concerned with the study of how the choice of rules in the social, economic and political realm aﬀects the nature of the processes of human interaction that evolve within these rules. The theory of democracy is concerned with institutional-organizational problems of self-governing polities. The purpose of the chapter is to examine some of the fundamental issues that are brought into focus by applying the perspective of constitutional economics to the rules and institutions of a democratic polity. Sections 2 and 3 discuss general characteristics of the constitutional economics paradigm that are of particular signiﬁcance to the study of democratic institutions. Sections 4 and 5 explore the contribution that a constitutional economics perspective can make in diagnosing organizational problems of democratic polities. Section 6 concludes. 2 CONSTITUTIONAL ECONOMICS AS APPLIED SCIENCE Constitutional economics in the Buchanan tradition is based on a methodological as well as a normative individualism. It starts from the presumptions that, ﬁrst, social aggregate phenomena should be explained in terms of the behavior of individual human beings plus the combined eﬀects of their interaction, and that, second, the values of the individuals involved should be regarded as the normative measuring rod against which the legitimacy of social institutions and collective arrangements is to be judged. Because...
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