Inequality, Extractive Institutions, and Growth in Nondemocratic Regimes

NOBUHIRO MIZUNO

PUBLIC CHOICE, VOLUME 170, ISSUE 1

Abstract: This study investigates the effect of income inequality on economic growth in nondemocratic regimes. We provide a model in which a self-interested ruler chooses an institution that constrains his or her policy choice. The ruler must care about the extent of citizens’ support in order to remain in power. Under an extractive institution, the ruler can extract a large share of citizens’ wealth, but faces a high probability of losing power because of low public support. We show that inequality affects the ruler’s tradeoff between the expropriation of citizens’ wealth and his or her hold on power. Substantial inequality among citizens makes support for the ruler inelastic with respect to his or her institutional choice. The ruler therefore chooses an extractive institution, which impedes investment and growth. These results provide an explanation for the negative relationship between inequality and growth as well as the negative relationship between inequality and institutional quality, both of which are observed in nondemocratic countries.

Privacy, Neuroscience, and Neuro-Surveillance

ADAM D. MOORE

RES PUBLICA, pp 1-19

Abstract: The beliefs, feelings, and thoughts that make up our streams of consciousness would seem to be inherently private. Nevertheless, modern neuroscience is offering to open up the sanctity of this domain to outside viewing. A common retort often voiced to this worry is something like, ‘Privacy is difficult to define and has no inherent moral value. What’s so great about privacy?’ In this article I will argue against these sentiments. A definition of privacy is offered along with an account of why privacy is morally valuable. In the remaining sections, several privacy protecting principles are defended that would limit various sorts of neuro-surveillance promised by advancements in neuroscience.

When Civil Society Uses an Iron Fist: The Roles of Private Associations in Rulemaking and Adjudication

ROBERT C. ELLICKSON

AMERICAN LAW AND ECONOMICS REVIEW, VOLUME 18, ISSUE 2

Abstract: Alexis de Tocqueville and Robert Putnam are but two of the many admirers of the countless private associations that lie at the core of civil society. This article seeks to advance understanding of the law-like activities of these associations. Residential community associations and sports leagues, for example, make rules and levy fines on members who violate them. The New York Diamond Dealers Club and the Writers Guild of America, like many other associations, have established internal arbitral panels for the resolution of member disputes. Courts are highly likely to defer to the outcomes of these arbitrations. The article’s central positive thesis, hedged with qualifications, is that a private association tends to engage in social control when it is the most cost-effective institution for addressing the issue at hand. This thesis is used to illuminate some otherwise puzzling associational practices, such as the efforts of the National Football League and other professional sports leagues to control players’ domestic violence off the field of play.

The Impact of Holy Land Crusades on State Formation: War Mobilization, Trade Integration, and Political Development in Medieval Europe

LISA BLAYDES AND CHRISTOPHER PAIK
INTERNATIONAL ORGANIZATION, VOLUME 70, ISSUE 3

Abstract: Holy Land Crusades were among the most significant forms of military mobilization to occur during the medieval period. Crusader mobilization had important implications for European state formation. We find that areas with large numbers of Holy Land crusaders witnessed increased political stability and institutional development as well as greater urbanization associated with rising trade and capital accumulation, even after taking into account underlying levels of religiosity and economic development. Our findings contribute to a scholarly debate regarding when the essential elements of the modern state first began to appear. Although our causal mechanisms—which focus on the importance of war preparation and urban capital accumulation—resemble those emphasized by previous research, we date the point of critical transition to statehood centuries earlier, in line with scholars who emphasize the medieval origins of the modern state. We also point to one avenue by which the rise of Muslim military and political power may have affected European institutional development.

Mindful Economics: The Production, Consumption, and Value of Beliefs

ROLAND BÉNABOU AND JEAN TIROLE
THE JOURNAL OF ECONOMIC PERSPECTIVES 30.3 (2016): 141-164

Abstract: In this paper, we provide a perspective into the main ideas and findings emerging from the growing literature on motivated beliefs and reasoning. This perspective emphasizes that beliefs often fulfill important psychological and functional needs of the individual. Economically relevant examples include confidence in ones’ abilities, moral self-esteem, hope and anxiety reduction, social identity, political ideology, and religious faith. People thus hold certain beliefs in part because they attach value to them, as a result of some (usually implicit) tradeoff between accuracy and desirability. In a sense, we propose to treat beliefs as regular economic goods and assets—which people consume, invest in, reap returns from, and produce, using the informational inputs they receive or have access to. Such beliefs will be resistant to many forms of evidence, with individuals displaying non-Bayesian behaviors such as not wanting to know, wishful thinking, and reality denial.

Two Concepts of Religious Liberty: The Natural Rights and Moral Autonomy Approaches to the Free Exercise of Religion

VINCENT PHILLIP MUÑOZ
AMERICAN POLITICAL SCIENCE REVIEW 110.2 (2016): 369-381

Abstract: Due in part to the influence of Michael McConnell, free exercise exemptionism is generally thought to be compatible with, if not dictated by, the founders’ church-state political philosophy. This article rejects that position, arguing instead that America’s constitutional tradition offers two distinct conceptions of religious liberty: the founders’ natural rights free exercise and modern moral autonomy exemptionism. The article aims to distinguish these two approaches by clarifying how they are grounded upon divergent philosophical understandings of human freedom and by explaining how they advance different views of what religious liberty is, how it is threatened, and, accordingly, how it is best protected. The article also attempts to demonstrate how our modern approach expands the protection for religious liberty in some ways but limits it in others.

Representation without Taxation, Taxation without Consent: The Legacy of Spanish Colonialism in America

ALEJANDRA IRIGOIN
REVISTA DE HISTORIA ECONÓMICA / JOURNAL OF IBERIAN AND LATIN AMERICAN ECONOMIC HISTORY, 34.2 (2016): 369-381

Abstract: The essay examines Spain’s colonial legacy in the long-run development of Spanish America. It surveys the fiscal and constitutional outcomes of independence and assesses the relative burden imposed by colonialism. Constitutional asymmetries between revenue collecting and spending agents constrained de facto governments’ power to tax. Inherent disparities embedded in the colonial fiscal system worsened with vaguely defined representation for subjects and territories and vexed their aggregation into a modern representative polity. Governments with limited fiscal capacity failed to deliver public goods and to distribute the costs and benefits of independence equitably. Growing indirect taxes, debt and money creation allowed them to transfer the fiscal burden to other constituents or future generations. Taxpayers became aware of the asymmetry between private contributions and public goods and hence favoured a low but regressive taxation. Comparisons with trajectories in the metropolis and the United States are offered to qualify this legacy.