the oxford handbook of .......................................................................................................................... POLITICAL ECONOMY .......................................................................................................................... Edited by BARRY R. WEINGAST and D ONALD A. WIT TMAN 1 the oxford handbook of POLITICAL ECONOMY t h e o x f o r d h and b oo k s o f p o l i t i c a l s c i e n c e General Editor: Robert E. Goodin The Oxford Handbooks of Political Science is a ten-volume set of reference books offering authoritative and engaging critical overviews of all the main branches of political science. The series as a whole is under the General Editorship of Robert E. Goodin, with each volume being edited by a distinguished international group of specialists in their respective fields: POLITICAL THEORY John S. Dryzek, Bonnie Honig & Anne Phillips POLITICAL INSTITUTIONS R. A. W. Rhodes, Sarah A. Binder & Bert A. Rockman POLITICAL BEHAVIOR Russell J. Dalton & Hans-Dieter Klingemann COMPARATIVE POLITICS Carles Boix & Susan C. Stokes LAW & POLITICS Keith E. Whittington, R. Daniel Kelemen & Gregory A. Caldeira PUBLIC POLICY Michael Moran, Martin Rein & Robert E. Goodin POLITICAL ECONOMY Barry R. Weingast & Donald A. Wittman INTERNATIONAL RELATIONS Christian Reus-Smit & Duncan Snidal CONTEXTUAL POLITICAL ANALYSIS Robert E. Goodin & Charles Tilly POLITICAL METHODOLO GY Janet M. Box-Steffensmeier, Henry E. Brady & David Collier This series aspires to shape the discipline, not just to report on it. Like the Goodin– Klingemann New Handbook of Political Science upon which the series builds, each of these volumes will combine critical commentaries on where the field has been together with positive suggestions as to where it ought to be heading. 3 Great Clarendon Street, Oxford ox2 6dp Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries Published in the United States by Oxford University Press Inc., New York © the several contributors 2006 The moral rights of the authors have been asserted Database right Oxford University Press (maker) First published 2006 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this book in any other binding or cover and you must impose the same condition on any acquirer British Library Cataloguing in Publication Data Data available Library of Congress Cataloging in Publication Data Data available Typeset by SPI Publisher Services, Pondicherry, India Printed in Great Britain on acid-free paper by Biddles Ltd., King’s Lynn, Norfolk ISBN 0–19–927222-0 978–0–19-927222-8 1 3 5 7 9 10 8 6 4 2 Dedicated to my parents, Barbara and Edward Weingast B.W. Dedicated to Noah, Emily, and Joshua D.W. Contents ..................................... About the Contributors xiii PART I INTRODUCTION 1. The Reach of Political Economy 3 Barry R. Weingast & Donald A. Wittman PART II VOTERS, CANDIDATES, AND PRESSURE GROUPS 2. Voters, Candidates, and Parties 29 Stephen Ansolabehere 3. Rational Voters and Political Advertising 50 Andrea Prat 4. Candidate Objectives and Electoral Equilibrium 64 John Duggan 5. Political Income Redistribution 84 John Londregan 6. The Impact of Electoral Laws on Political Parties 102 Bernard Grofman PART III LEGISLATIVE B ODIES 7. Legislatures and Parliaments in Comparative Context 121 Michael Laver 8. The Organization of Democratic Legislatures 141 Gary W. Cox viii contents 9. Coalition Government 162 Daniel Diermeier 10. Does Bicameralism Matter? 180 Michael Cutrone & Nolan McCarty PART IV INTERACTION OF THE LEGISLATURE, PRESIDENT, BUREAUCRACY, AND THE COURTS 11. The New Separation-of-Powers Approach to American Politics 199 Rui J. P. de Figueiredo, Jr., Tonja Jacobi & Barry R. Weingast 12. Pivots 223 Keith Krehbiel 13. The Political Economy of the US Presidency 241 Charles M. Cameron 14. Politics, Delegation, and Bureaucracy 256 John D. Huber & Charles R. Shipan 15. The Judiciary and the Role of Law 273 Mathew D. McCubbins & Daniel B. Rodriguez PART V CONSTITUTIONAL THEORY 16. Constitutionalism 289 Russell Hardin 17. Self-Enforcing Democracy 312 Adam Przeworski 18. Constitutions as Expressive Documents 329 Geoffrey Brennan & Alan Hamlin 19. The Protection of Liberty, Property, and Equality 342 Richard A. Epstein 20. Federalism 357 Jonathan A. Rodden contents ix PART VI SOCIAL CHOICE 21. Social Choice 373 Hervé Moulin 22. A Tool Kit for Voting Theory 390 Donald G. Saari 23. Interpersonal Comparisons of Well-Being 408 Charles Blackorby & Walter Bossert 24. Fair Division 425 Steven J. Brams PART VII PUBLIC FINANCE AND PUBLIC ECONOMICS 25. Structure and Coherence in the Political Economy of Public Finance 441 Stanley L. Winer & Walter Hettich 26. Political Economy of Fiscal Institutions 464 Jürgen von Hagen 27. Voting and Efficient Public Good Mechanisms 479 John Ledyard 28. Fiscal Competition 502 David E. Wildasin PART VIII POLITICS AND MACROECONOMICS 29. The Non-Politics of Monetary Policy 523 Susanne Lohmann 30. Political-Economic Cycles 545 Robert J. Franzese, Jr., & Karen Long Jusko 31. Voting and the Macroeconomy 565 Douglas A. Hibbs, Jr. 32. The Political Economy of Exchange Rates 587 J. Lawrence Broz & Jeffry A. Frieden