The Encyclopedia of Public Choice Volume I the Editors

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The Encyclopedia of Public Choice Volume I The Editors

CHARLES K. ROWLEY, Duncan Black Professor of Economics, George Mason University and General Director, The Locke Institute; and Dr. Dr. h.c.mult. FRIEDRICH SCHNEIDER, Department of Economics, The University of Linz

Advisory Board

JAMES M. BUCHANAN, Buchanan House, George Mason University

BERNARD GROFMAN, Department of Political Science, University of California, Irvine

ARYE L. HILLMAN, Department of Economics, Bar-Ilan University

MARTIN PALDAM, Department of Economics, Aarhus University

WILLIAM F. SHUGHART II, Department of Economics, University of Mississippi

ROBERT D. TOLLISON, Department of Economics, Clemson University

DENNIS C. MUELLER, Department of Economics, University of Vienna

MICHAEL C. MUNGER, Department of Political Science, Duke University

PETER C. ORDESHOOK, Humanities and Social Sciences, Cal Tech

GORDON TULLOCK, School of Law, George Mason University

HANNELORE WECK-HANNEMANN, Institut Fur Finanzwissenschaft, Universitat Innsbruck The Encyclopedia of Public Choice

Editors

CHARLES K. ROWLEY The Locke Institute, and George Mason University

and FRIEDRICH SCHNEIDER Johannes Kepler University of Linz, Institute of Economic Policy

KLUWER ACADEMIC PUBLISHERS NEW YORK, BOSTON, DORDRECHT, LONDON, MOSCOW eBook ISBN: 0-306-47828-5 Print ISBN: 0-7923-8607-8

No part of this eBook may be reproduced or transmitted in any form or by any means, electronic, mechanical, recording, or otherwise, without written consent from the Publisher

Created in the United States of America

Visit Kluwer Online at: http://kluweronline.com and Kluwer's eBookstore at: http://ebooks.kluweronline.com We dedicate ‘The Encyclopedia of Public Choice’ to the memory of Duncan Black 23 May 1908 to 14 January 1991 The Founding Father of Public Choice TABLE OF CONTENTS

Preface ...... xiii

Acknowledgments ...... xvii

ESSAYS

Public Choice and Constitutional Political Economy Charles K. Rowley ...... 3

Public Choice: An Introduction Dennis C. Mueller ...... 32

Are Vote and Popularity Functions Economically Correct? Martin Paldam ...... 49

Constitutional Political Economy James M. Buchanan ...... 60

Corruption Susan Rose-Ackerman ...... 67

Dictatorship Ronald Wintrobe ...... 77

Environmental Politics Hannelore Weck-Hannemann ...... 91

Experimental Public Choice Arthur J.H.C. Schram ...... 96

Gordon Tullock at Four Score Years: An Evaluation Charles K. Rowley ...... 105

Interest Group Behavior and Influence Frans van Winden ...... 118

International Trade Policy: Departure from Free Trade Arye L. Hillman ...... 129

James M. Buchanan Robert D. Tollison ...... 139

vii viii TABLE OF CONTENTS

Milton Friedman, 1912: Harbinger of the Public Choice Revolution Charles K. Rowley and Anne Rathbone ...... 146

Monetary Policy and Central Bank Behavior Manfred Gärtner ...... 159

The Political Economy of Taxation: Positive and Normative Analysis when Collective Choice Matters Stanley L. Winer and Walter Hettich ...... 173

Public Choice from the Perspective of Economics Robert D. Tollison ...... 191

Public Choice from the Perspective of the History of Thought Charles K. Rowley ...... 201

Public Choice Theory from the Perspective of Law Francesco Parisi ...... 214

Public Choice from the Perspective of Philosophy Hartmut Kliemt ...... 235

Public Choice from the Perspective of Sociology Viktor J. Vanberg ...... 244

Public Finance Harvey S. Rosen ...... 252

Regulation and Antitrust William F. Shughart II ...... 263

Scholarly Legacy of Mancur Olson Melvin J. Hinich and Michael C. Munger ...... 284

Shadow Economy Friedrich Schneider ...... 286

Social Choice, Contracts and Logrolling Peter Bernholz ...... 296

Spatial Theory Melvin J. Hinich and Michael C. Munger ...... 305

Trade Liberalization and Globalization Arye L. Hillman ...... 312 TABLE OF CONTENTS ix

William H. Riker John Aldrich ...... 321

BIOGRAPHIES

ALDRICH, John Herbert ...... 327

ANDERSON, Lisa Reneé ...... 328

BAUMOL, William J...... 328

BAVETTA, Sebastiano ...... 329

BENNETT, James Thomas ...... 330

BENSON, Bruce Lowell ...... 330

BERNHOLZ, Peter ...... 332

BESLEY, Timothy John ...... 334

BESOCKE, Portia DiGiovanni ...... 335

BOETTKE, Peter J...... 335

BORCHERDING, Thomas Earl ...... 336

BRADBURY, John Charles ...... 337

BRAMS, Steven J...... 338

BUCHANAN, James McGill ...... 339

CAIN, Michael J.G...... 340

CAPLAN, Bryan Douglas ...... 341

CONGLETON, Roger Douglas ...... 341

COUGHLIN, Peter Joseph ...... 343

COWEN, Tyler ...... 344

CRAIN, William Mark ...... 344

CREW, Michael Anthony ...... 346 x TABLE OF CONTENTS

DA EMPOLI, Domenico ...... 347

DAVIS, Otto Anderson ...... 348

EKELUND, Robert Burton Jr...... 349

FISCHEL, William A...... 351

FROHLICH, Norman ...... 352

GARRETT, Thomas A...... 353

GOFF, Brian L...... 354

GROFMAN, Bernard N...... 355

HANSON, Robin Dale ...... 357

HETTICH, Walter ...... 357

HINICH, Melvin J...... 358

HOLCOMBE, Randall Gregory ...... 359

HOLLER, Manfred Joseph ...... 361

HOLT, Charles A...... 362

KAEMPFER, William Hutchison ...... 363

KEIL, Manfred Werner ...... 364

KENNY, Lawrence Wagner ...... 365

KLEINDORFER, Paul Robert ...... 366

KURRILD-KLITGAARD, Peter ...... 367

LABAND, David Neil ...... 368

LANGBEIN, Laura ...... 369

LEE, Dong Won ...... 370

LEE, Dwight R...... 370

LOHMANN, Susanne ...... 372 TABLE OF CONTENTS xi

LÓPEZ, Edward John ...... 373

MATSUSAKA, John G...... 374

MCCHESNEY, Fred Sanderson ...... 375

MUDAMBI, Ram ...... 375

MUNGER, Michael Curtis ...... 376

NAVARRA,Pietro ...... 377

OPPENHEIMER, Joe ...... 378

PADOVANO,Fabio ...... 379

PALDA, Filip ...... 381

PARISI, Francesco ...... 382

PEACOCK, Alan Turner ...... 383

PECORINO, Paul ...... 384

RATHBONE,Anne Elissa ...... 385

REKSULAK, Michael ...... 385

ROMER, Thomas ...... 386

ROWLEY, Charles Kershaw ...... 387

RUBIN, Paul Harold ...... 388

SASS, Tim Roger ...... 390

SCHMID-LUEBBERT, Stefanie ...... 391

SCHNEIDER, Friedrich Georg ...... 391

SCHOFIELD, Norman James ...... 392

SCULLY, Gerald William ...... 393

SENED, Itai ...... 394

SHUGHART, William Franklin II ...... 395 xii TABLE OF CONTENTS

SMITH, Vernon L...... 396

SOBBRIO, Giuseppe ...... 398

SOBEL, Russell Steven ...... 399

STEPYKINA, Ekaterina ...... 400

STRATMANN, Thomas ...... 400

THOMPSON, Earl ...... 401

THORNTON, Mark ...... 401

TIDEMAN, Thorwald Nicolaus ...... 402

TOLLISON, Robert Dewitt ...... 403

TOWER, Edward ...... 405

TULLOCK, Gordon ...... 406

TWIGHT, Charlotte Augusta Lewis ...... 407

URKEN, Arnold Bernard ...... 408

VACHRIS, Michelle Albert ...... 409

VANBERG,Viktor J...... 410

VAUBEL, Roland ...... 412

WAGNER, Richard E...... 413

WECK-HANNEMANN, Hannelore ...... 414

WILLETT, Thomas Dunaway ...... 415

WILLIAMS, Walter E...... 417

WINER, Stanley Lewis ...... 418

WITTMAN, Donald Alan ...... 419

WU, Wenbo ...... 420

Index ...... 421 PREFACE

The Encyclopedia provides a detailed and comprehensive account of the subject known as public choice. However, the title would not convey sufficiently the breadth of the Encyclopedia’s contents which can be summarized better as the fruitful interchange of economics, political science and moral philosophy on the basis of an image of man as a purposive and responsible actor who pursues his own objectives as efficiently as possible. This fruitful interchange between the fields outlined above existed during the late eighteenth century during the brief period of the Scottish Enlightenment when such great scholars as David Hume, Adam Ferguson and Adam Smith contributed to all these fields, and more. However, as intellectual specialization gradually replaced broad-based scholarship from the mid- nineteenth century onwards, it became increasingly rare to find a scholar making major contributions to more than one. Once Alfred Marshall defined economics in neoclassical terms, as a nar- row positive discipline, the link between economics, political science and moral philosophy was all but severed and economists redefined their role into that of ‘the humble dentist’ providing technical economic information as inputs to improve the performance of impartial, benevolent and omniscient governments in their attempts to promote the public interest. This indeed was the dominant view within an economics profession that had become besotted by the economics of John Maynard Keynes and Paul Samuelson immediately following the end of the Second World War. Even during this ‘dark age’ for political economy, however, a little known Scot named Duncan Black was sowing the seeds for a renaissance that would once again provide for a reunion between economics and political science. Black launched the public choice research program in 1948 with a seminal paper on the rationale of group decision-making and in so doing earned later fame as the founding father of public choice. Black’s seminal contribution was extended in 1951 by Kenneth Arrow in his famous 1951 monograph entitled Social Choice and Individual Values. A further major extension occurred in 1957, when Anthony Downs published his seminal book entitled An Economic Theory of Democracy. In 1962, James Buchanan and Gordon Tullock, in their famous book The Calculus of Consent, extended the perspective of public choice by shifting attention away from direct elections and parliamentary democracy, to outline a rational choice approach to the logical foundations of a constitutional republic. In 1965, Mancur Olson opened up the discussion of interest group behavior to rational choice analysis in his famous book entitled The Logic of Collective Action. In 1971 William A. Niskanen opened up the discussion of bureaucratic behavior to rational choice analysis in his book entitled Bureaucracy and Representative Government.

xiii xiv PREFACE

These six contributions constitute the foundations of the public choice research program. Two other books also contributed to the early public choice tradition, namely the 1951 monograph by Black and Newing entitled Committee Decisions with Complementary Valuation and the 1962 master- piece by William Riker entitled The Theory of Political Coalitions. All these works are as relevant to scholars of public choice now as they were several decades ago when they were written. Since public choice first emerged during the years of reconstruction from the devastation of the Second World War, the world’s political environment has evolved and changed dramatically. The Marshall Plan enabled Western Europe to eliminate its dictatorships and to establish and/or to reinforce democracy. The European colonial powers eased themselves out of their imperial roles, releasing their former colonies into independence, albeit in many cases an independence that rapidly deteriorated into the one party state, outright dictatorship or even kleptocracy. Even Latin-America slowly has eased itself into democracy, albeit in many cases of a fragile and unstable nature. The United States utilized its economic strength and its political resilience to confront and to contain the USSR throughout the Cold War and eventually to defeat it, thus opening up Eastern Europe and even Russia itself to varying forms of democratic or semi-democratic government. The remaining communist dictatorships, notably The People’s Republic of China, Cuba and North Korea, clearly are endangered species, unlikely to survive the first decade of the new century. The last bastions of non-communist, non-sub- Saharan African dictatorship, mostly located in the Middle East, are finding it increasingly costly and difficult to fend off the democratic desires of their down-trodden and mostly impoverished subjects. For the first time in the history of the world, a majority of individuals now live under conditions of democracy, a state that public choice is uniquely qualified to analyze. Given the enormity of the political changes outlined above, it is very reas- suring to discover, not least through the contributions to this Encyclopedia, that public choice has retained its ability to explain and to predict the behavior of all actors in political markets — even the behavior of al-Qaeda terrorists — within the framework of the rational choice approach. The Encyclopedia of Public Choice is a monumental offering. It consists of 306 entries each assigned to one of three headings, namely essays, concepts and biographies. The Encyclopedia is an entirely new work, all its contributions being newly commissioned. Drafts of the entries were received from the authors over the period October 2001 through September 2002, most of them arriving during the six months March 2002 through August 2002. The essays are designed to be far-ranging discussions of central issues in the public choice literature, and evaluations of the lives and works of some of the founding fathers, each written by authors who have worked extensively in those fields. The authors were asked to avoid writing surveys, but rather to present their own views on the topic under review. PREFACE xv

The concepts are designed to be more narrowly-focused contributions, offering up-to-date introductions and first-rate bibliographies. Once again, the authors were expected to explicate their own views and not to attempt to write a comprehensive survey. In several cases, where the issue was deemed to be sufficiently controversial, authors with differing viewpoints provide competing interpretations. Every contributor to the essay and/or the concepts sections of the Encyclopedia was invited to contribute his or her own biography. The large majority complied. These are short outlines modeled on Mark Blaug’s Who’s Who in Economics. They provide interested readers with a short biography, a limited list of publications and a brief statement of the scholar’s self- perceived career contribution to public choice. The allocation of entries across these three categories is as follows: 28 essays, including two introductions, one by Charles K. Rowley and one by Dennis C. Mueller; 186 concepts; and 92 biographies. The Encyclopedia itself consists of well in excess of one million words. The contributors, and the editors, have taken care to make the language of the Encyclopedia as non- technical and comprehensible as possible. For this reason, the Encyclopedia should be accessible to all scholars, all graduate and undergraduate students of economics, political science, and public choice as well as to most scholars and students of such closely related disciplines as law, philosophy, sociology and psychology. The Encyclopedia should be an indispensable companion to all practitioners of public policy. The editors have made every effort to present a well-balanced and comprehensive body of public choice scholarship from the early beginnings of the discipline to its current flourishing state. By and large, we believe that we have achieved this goal. However, as always, the proof of the pudding is in the eating. We trust that you will enjoy the rich banquet that is set before you.

CHARLES K. ROWLEY Duncan Black Professor of Economics George Mason University and General Director The Locke Institute and

PROFESSOR DR. DR. h.c.mult. FRIEDRICH SCHNEIDER Department of Economics University of Linz

REFERENCES Arrow, K.F. (1950). “A difficulty in the concept of social welfare.” Journal of Political Economy, 58: 328–346. xvi PREFACE

Arrow, K.J. Social Choice and Individual Values. New York: Wiley. Black, D. (1948). “On the rationale of group decision-making.” Journal of Political Economy, 56: 23–34. Black, D. and Newing, R.A. (1951). Committee Decisions with Complementary Valuation. London: W. Hodge. Blaug, M. (2000). Who’s Who in Economics. Cheltenham, UK and Northampton, USA: Edward Elgar Publishing. Buchanan, J.M. and Tullock, G. (1962). The Calculus of Consent. Ann Arbor: University of Michigan Press. Downs, A. (1957). An Economic Theory of Democracy. New York: Harper & Row. Niskanen, W.A. (1971). Bureaucracy and Representative Government. New York: Aldine-Atherton. Olson, M. The Logic of Collective Action. Cambridge: Harvard University Press. Riker, W. (1962). The Theory of Political Coalitions. New Haven: Yale University Press. ACKNOWLEDGMENTS

Our acknowledgments are due first to each scholar who has contributed to this Encyclopedia, and most especially to those who have made multiple contributions. Their enthusiasm and commitment to the project made our editorial task much easier than it would otherwise have been. We are especially indebted to the members of the distinguished Advisory Board (listed sepa- rately at the beginning of this volume) whose responses to our request for advice and help were always friendly and helpful. In particular we are indebted to William F. Shughart II and Robert D. Tollison whose help and intellectual support went far beyond anything that we could possibly expect. We are also indebted to Marilea Polk Fried and Marian Scott at Kluwer Academic Publishers, both for their editorial help, and for their persistence in making sure that we adhered to deadlines. The project was organized through the auspices of The Locke Institute in Fairfax, Virginia. The Locke Institute acknowledges with deep gratitude the financial support of the following individuals and foundations, without whose generosity, we could not successfully have completed this project: James T. Bennett; Robert S. Elgin; Daniel Oliver; Gordon Tullock; The Chase Foundation of Virginia and the Sunmark Foundation. Charles Rowley is grateful to the James M. Buchanan Center for Political Economy for Summer research support, and to Anne Rathbone for project support.

xvii The Encyclopedia of Public Choice Volume II The Editors

Advisory Board

JAMES M. BUCHANAN, Buchanan House, George Mason University

BERNARD GROFMAN, Department of Political Science, University of California, Irvine

ARYE L. HILLMAN, Department of Economics, Bar-Ilan University

MARTIN PALDAM, Department of Economics, Aarhus University

WILLIAM F. SHUGHART II, Department of Economics, University of Mississippi

ROBERT D. TOLLISON, Department of Economics, Clemson University

DENNIS C. MUELLER, Department of Economics, University of Vienna

MICHAEL C. MUNGER, Department of Political Science, Duke University

PETER C. ORDESHOOK, Humanities and Social Sciences, Cal Tech

GORDON TULLOCK, School of Law, George Mason University

HANNELORE WECK-HANNEMANN, Institut Fur Finanzwissenschaft, Universitat Innsbruck The Encyclopedia of Public Choice

Editors

CHARLES K. ROWLEY The Locke Institute, and George Mason University

and FRIEDRICH SCHNEIDER Johannes Kepler University of Linz, Institute of Economic Policy

KLUWER ACADEMIC PUBLISHERS NEW YORK, BOSTON, DORDRECHT, LONDON, MOSCOW eBook ISBN: 0-306-47828-5 Print ISBN: 0-7923-8607-8

No part of this eBook may be reproduced or transmitted in any form or by any means, electronic, mechanical, recording, or otherwise, without written consent from the Publisher

Created in the United States of America

Preface ...... xxi

Acknowledgements ...... xxv

CONCEPTS

Academia Susanne Lohmann ...... 3

Al-Qaeda Anne Rathbone and Charles K. Rowley ...... 5

Alternative Voting Methods Bernard Grofman ...... 9

Altruism Paul H. Rubin ...... 12

The Anatomy of Political Representation Tim R. Sass ...... 17

Approval Voting Steven J. Brams ...... 20

Arbitration and Bargaining Paul Pecorino ...... 22

Arrow’s Impossibility Theorem Bernard Grofman ...... 25

An ‘Austrian’ Perspective on Public Choice Peter Boettke and Peter Leeson ...... 27

Autocracy Gordon Tullock ...... 32

Autocratic Succession Peter Kurrild-Klitgaard ...... 34

Bicameralism John Charles Bradbury and W. Mark Crain ...... 39

vii viii TABLE OF CONTENTS

Blackmail Walter E. Williams ...... 41

Black’s Single-Peakedness Condition Bernard Grofman ...... 43

Budgetary Processes W. Mark Crain ...... 46

Budget Deficits William F. Shughart II ...... 49

Bureaucratic Discretion Laura Langbein ...... 53

Campaign Contributions and Campaign Finance Thomas Stratmann ...... 59

Campaign Finance 1 Edward J. López ...... 62

Campaign Finance 2 Filip Palda ...... 66

Central Banks Susanne Lohmann ...... 69

Chicago Political Economy Robert D. Tollison ...... 74

The Clayton Act Carlos D. Ramírez ...... 75

Coalitions and Power Indices Manfred J. Holler ...... 78

Coalitions and Social Choice Itai Sened ...... 83

Coase Theorem and Political Markets Francesco Parisi ...... 85

Coercion Sebastiano Bavetta and Antonio Cognata ...... 91 TABLE OF CONTENTS ix

Collective Action under the Articles of Confederation Keith Dougherty ...... 93

Committee Assignments Michael Munger ...... 95

Committee Jurisdictions and PAC Contributions Michael C. Munger ...... 98

Committees in Legislatures Randall G. Holcombe ...... 100

Commons and Anticommons Francesco Parisi and Ben Depoorter ...... 102

Constitution Gordon Tullock ...... 104

Constitutional Frameworks and Economic Progress Gerald W. Scully ...... 105

The Constitution of the European Union Stephanie Schmid-Lubbert and Hans-Bernd Schafer ...... 106

Constitutional Political Economy Stefan Voigt ...... 112

The Contemporary Political Economy Approach to Bureaucracy Thomas E. Borcherding and Portia D. Besocke ...... 116

Contractarianism James M. Buchanan ...... 121

Corruption 1 Francesco Forte ...... 123

Corruption 2 Omar Azfar ...... 126

Cost and Choice James M. Buchanan ...... 130

The Cost Disease of the Personal Services William J. Baumol ...... 132 x TABLE OF CONTENTS

Customary Law Francesco Parisi ...... 136

The Demand-Revealing Process T. Nicolaus Tideman ...... 140

Deregulation of Postal Service Michael A. Crew and Paul R. Kleindorfer ...... 142

Dictators and Social Contracts Stefan Voigt ...... 146

Direct Democracy John G. Matsusaka ...... 149

Discrimination Walter E. Williams ...... 153

Dynamic Inconsistency W. Mark Crain ...... 157

Economic Freedom and its Measurement Sebastiano Bavetta ...... 161

Economic Freedom and Political Freedom Wenbo-Wu and Otto A. Davis ...... 163

Economic Regulation Robert D. Tollison ...... 172

The Economic Theory of Clubs Gary M. Anderson, William F. Shughart II and Robert D. Tollison . . . 175

Economists versus the Public on Economic Policy Bryan Caplan ...... 180

Education and the State Eugenia F. Toma ...... 183

Efficiency of Democracy Donald Wittman ...... 186

Efficiency of Democracy? Charles K. Rowley and Michelle A. Vachris ...... 189 TABLE OF CONTENTS xi

The Efficiency of the Common Law Hypothesis Francesco Parisi ...... 195

Elected versus Appointed Regulators Timothy Besley ...... 198

Election Models Peter J. Coughlin ...... 201

Electoral College Randall G. Holcombe ...... 206

Electoral Competition in Mixed Systems of Representation Ram Mudambi and Pietro Navarra ...... 208

The Elusive Median Voter Thomas Romer ...... 211

Emerging from the Hobbesian Jungle Bruce L. Benson ...... 213

Endogenous Morality Bruce L. Benson ...... 216

Enron Michael Reksulak and William F. Shughart II ...... 219

Environmental Politics and Economic Development Roger D. Congleton ...... 224

The Euro Roland Vaubel ...... 229

European Political Integration Roland Vaubel ...... 230

Evolution of Institutions Earl Thompson ...... 232

The Evolution of Law Bruce L. Benson ...... 237

Experimental Economics and Public Choice Lisa R. Anderson and Charles A. Holt ...... 240 xii TABLE OF CONTENTS

Experimental Public Choice Vernon L. Smith ...... 243

Expressive Voting and Redistribution Russell S. Sobel and Gary A. Wagner ...... 245

Fair Division Steven J. Brams ...... 248

Fame and Politics Tyler Cowen ...... 250

Federal Reserve System Mark Toma ...... 251

Forecasting Presidential Elections in the United States Henry Chappell ...... 254

Game Theory Steven J. Brams ...... 257

Game Theory in Public Choice Robin D. Hanson ...... 258

Generality and the Efficiency of Government Decision Making Roger D. Congleton ...... 261

Group Roles in Evolution and Cognition Adam Gifford Jr...... 264

Growth of Local Government in the United States Randall G. Holcombe ...... 268

The Growth of Public Expenditure Sir Alan Turner Peacock ...... 270

The Growth of the Relative Size of Government Thomas E. Borcherding and Dong Lee ...... 273

Heresthetics and the Evolution of the US Constitution Norman Schofield ...... 279

Homo Economicus Robert D. Tollison ...... 281 TABLE OF CONTENTS xiii

Human Evolution and Political Behavior Paul H. Rubin ...... 284

Ideology Paul H. Rubin ...... 291

The Importance of the Middle in Spatial Politics Otto A. Davis and Melvin J. Hinich ...... 297

Initiative and Referendum John G. Matsusaka ...... 300

Institutions of Trade Protection Willem Thorbecke ...... 304

Interest Groups 1 Michael C. Munger ...... 307

Interest Groups 2 Filip Palda ...... 312

International Game of Power Peter Bernholz ...... 315

International Organization Roland Vaubel ...... 319

Internet Voting Arnold B. Urken ...... 321

Is Russia a Market Economy? Ekaterina Stepykina ...... 323

Is Voting Rational? William F. Shughart II ...... 326

The Italian Public Finance Contribution to Public Choice Domenico da Empoli ...... 329

The Judiciary Gary M. Anderson ...... 334

The Law and Economics Movement Francesco Parisi ...... 341 xiv TABLE OF CONTENTS

Legal Precedents and Judicial Discretion Ben Deoorter and ...... 343

Legal Rules and Standards Hans-Bernd Schaefer ...... 347

Legislative Politics William F. Shughart II ...... 350

Legislators Robert D. Tollison ...... 353

Leviathan Models of Government Fabio Padovano ...... 356

Logic of Collective Action William F. Shughart II ...... 360

The Logic of Liberty Emory Peters and ...... 363

Logrolling 1 Thomas Stratmann ...... 372

Logrolling 2 Joe Oppenheimer ...... 375

Meddlesome Preferences and Rent Extraction: The Tobacco Shakedown Richard E. Wagner ...... 378

The Median in Politics David M. Levy ...... 380

The Median Voter Model Roger D. Congleton ...... 382

Medieval Church Robert B. Ekelund, Jr...... 387

Mercantilism Robert B. Ekelund, Jr...... 388

Monetary Politics Henry Chappell ...... 390 TABLE OF CONTENTS xv

The New Deal William F. Shughart II ...... 394

Nonprofit Organizations James T. Bennett and William Snavely ...... 397

The Origins of Social Choice Theory Arnold B. Urken ...... 400

The Paradox of Rebellion Peter Kurrild-Klitgaard ...... 403

Parchment versus Guns Richard E. Wagner and Holbert L. Harris ...... 406

Political and Cultural Nationalism Frank Buckley and Francesco Parisi ...... 409

Political Business Cycles Thomas D. Willett and Manfred W. Keil ...... 411

Political Economics and Public Choice Fabio Padovano ...... 415

The Political Economy of FEMA Disaster Payments Thomas A. Garrett and Russell S. Sobel ...... 418

The Political Economy of Italian Electoral Reform Ram Mudambi, Pietro Navarra and Giuseppe Sobbrio ...... 420

Political Transaction-cost Manipulation Charlotte A.L. Twight ...... 424

Pressure Groups and Uninformed Voters Donald Wittman ...... 429

Principal–Agent Relationships in the Theory of Bureaucracy Michelle A. Vachris ...... 433

Prohibition Mark Thornton ...... 437

Public Choice and Socialism Peter J. Boettke and Peter T. Leeson ...... 439 xvi TABLE OF CONTENTS

Public Choice and the Chicago School of Antitrust Fred S. McChesney ...... 444

Public Choice in Italy Fabio Padovano ...... 448

Public Enterprise Louis De Alessi ...... 450

Public Finance and the Median Voter Model Randall G. Holcombe ...... 453

Public Finance in Democratic Process Richard E. Wagner ...... 455

Public Goods Laura Razzolini ...... 457

Public Schools Lawrence W. Kenny ...... 459

Public Utility Regulation Michael A. Crew and Paul R. Kleindorfer ...... 462

Rational Choice Approaches to Economic and Political History Norman Schofield ...... 465

Rational Ignorance Bryan Caplan ...... 468

Rational Irrationality Bryan Caplan ...... 470

Reciprocity Francesco Parisi ...... 472

Redistributive Politics 1 Gordon Tullock ...... 477

Redistributive Politics 2 Thomas Romer ...... 479

Regulating Government J.R. Clark and Dwight R. Lee ...... 482 TABLE OF CONTENTS xvii

Regulatory Takings Karol Boudreaux ...... 484

Rent Dissipation Gordon Tullock ...... 491

Rent Extraction Fred S. McChesney ...... 493

Rent Seeking Robert D. Tollison ...... 495

Rent Seeking and Political Institutions Roger D. Congleton ...... 499

Rent-Seeking Games Amihai Glazer ...... 502

Rent Seeking in Development Paul Pecorino ...... 504

The Rule of Law Peter J. Boettke and Ryan Oprea ...... 507

Rules Versus Standards Francesco Parisi ...... 510

Self-Interest Norman Frohlich and Joe Oppenheimer ...... 517

Selfish Gene Gordon Tullock ...... 519

September 11, 2001 William F. Shughart II ...... 520

Single-Peaked Preferences and Median Voter Theorems Peter J. Coughlin ...... 524

The Social Cost of Rent Seeking David N. Laband ...... 528

Sortition Alan A. Lockard ...... 530 xviii TABLE OF CONTENTS

Standard Oil and Microsoft: Antitrust Lessons Donald J. Boudreaux ...... 533

State-Sponsored Murder as a Rent-Seeking Activity Gerald W. Scully ...... 536

Structure-Induced Equilibrium William F. Shughart II ...... 538

Supply of Public Goods Francesco Forte ...... 540

The Supreme Court Brian Goff ...... 545

Takings and Public Choice: The Persuasion of Price William A. Fischel ...... 549

Term limits 1 Edward J. López ...... 553

Term Limits 2 Bruce Bender ...... 555

Terrorism Anne Rathbone and Charles K. Rowley ...... 558

The Theory and Measurement of Economic Freedom Gerald W. Scully ...... 563

Totalitarianism Peter Bernholz ...... 565

Trade Protectionism William H. Kaempfer, Edward Tower and Thomas D. Willett ...... 570

Transitional Economies Michael J.G. Cain ...... 576

Transitions from Autocracy to Democracy Peter Bernholz ...... 580

Triangulation William F. Shughart II ...... 584 TABLE OF CONTENTS xix

Underground Government: The Off-Budget Public Sector James T. Bennett ...... 587

The Value of Voting Rights Hannelore Weck-Hannemann ...... 590

Votes for Women Lawrence W. Kenny ...... 592

Voting Equipment, Minorities and the Poor Stephen Knack ...... 594

Voting in U.S. Presidential Elections Robert D. Tollison ...... 596

Voting Paradoxes in List Systems of Proportional Representation Peter Kurrild-Klitgaard ...... 599

The War on Drugs Donald J. Boudreaux ...... 603

Welfare Economics and Public Choice Timothy Besley ...... 606

Welfare Economics and the Theory of the State William J. Baumol ...... 610

Why Government Succeeds Amihai Glazer ...... 613

Index ...... 617 PREFACE

xxi xxii PREFACE

CHARLES K. ROWLEY Duncan Black Professor of Economics George Mason University and General Director The Locke Institute and

PROFESSOR DR. DR. h.c.mult. FRIEDRICH SCHNEIDER Department of Economics University of Linz

REFERENCES Arrow, K.F. (1950). “A difficulty in the concept of social welfare.” Journal of Political Economy, 58: 328–346. xxiv PREFACE

Our acknowledgments are due first to each scholar who has contributed to this Encyclopedia, and most especially to those who have made multiple contributions. Their enthusiasm and commitment to the project made our editorial task much easier than it would otherwise have been. We are especially indebted to the members of the distinguished Advisory Board (listed sepa- rately at the beginning of this volume) whose responses to our request for advice and help were always friendly and helpful. In particular we are indebted to William F. Shughart II and Robert D. Tollison whose help and intellectual support went far beyond anything that we could possibly expect. We are also indebted to Marilea Polk Fried and Marian Scott at Kluwer Academic Publishers, both for their editorial help, and for their persistence in making sure that we adhered to deadlines. The project was organized through the auspices of The Locke Institute in Fairfax, Virginia. The Locke Institute acknowledges with deep gratitude the financial support of the following individuals and foundations, without whose generosity, we could not successfully have completed this project: James T. Bennett; Robert S. Elgin; Daniel Oliver; Gordon Tullock; The Chase Foundation of Virginia and the Sunmark Foundation. Charles Rowley is grateful to the James M. Buchanan Center for Political Economy for summer research support, and to Anne Rathbone for project support.

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