The Constitutional Political Economy Approach
During the last ca. 15 years economists provided numerous theoretical and empirical confirmations of a significant role of constitutions for the working of the economy and economic outcomes, in particular with respect to electoral systems, models of government, constitutional rights, and constitutional enforcement mechanisms (see survey by Voigt 2011b). This approach, rooted in Constitutional Economics, views the constitution as a set of “legal-institutional-constitutional rules that constrain the choices and activities of economic and political agents” (Buchanan 1987, p. 585). The state constitutional system serves primarily as a mechanism allowing to counteract time-inconsistency problems connected with drafting and implementing economic policy. Containing rules that impose constraints on activity of state authorities, the constitution acts as a mechanism allowing to turn promises made by representatives of state power into credible commitments.
Post-socialist transition taking place since 1989 in countries of Central and Eastern Europe, as well as later in Central and Southwestern Asia, provided a particularly fruitful ground for Constitutional Economics studies. Since 1990 all post-socialist countries of Europe and Asia1, with the exception of Latvia, adopted new constitutions envisaging varying solutions as regards the structure of government, bill of rights and other issues. This unprecedented time of broad-scale constitutional and, more generally, institutional change has sometimes been called a “gigantic natural experiment” (Elster 1991, p. 449), attracting interest of legal scholars, political scientists, sociologists and other social scientists. The contribution of economists concerns, in particular, linking constitutional change with economic policy pursued in these countries and economic...
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