Do Social Rights Affect Social Outcomes?



Abstract: While the United Nations and NGOs are pushing for global judicialization of economic, social, and cultural rights (ESCRs), little is known of their consequences. We provide evidence of the effects of introducing three types of ESCRs into the constitution: the rights to education, health, and social security. Employing a large panel covering annual data from 160 countries in the period 1960–2010, we find no robust evidence of positive effects of ESCRs. We do, however, document adverse medium‐term effects on education, inflation, and civil rights.

Regressive effects of regulation



Abstract: Regulation of health and safety has placed an unacknowledged burden on low-income households and workers. Billions of dollars are spent every year on regulations that seek to reduce life-threatening risks that arise from auto travel, air travel, air and water pollution, food, drugs and construction; the list goes on. Today, some form of regulation affects nearly every aspect of our lives (Shleifer, in: Kessler (ed) Regulation vs. litigation: perspectives from economics and law, University of Chicago Press, Chicago, 2010). All of the regulatory rules ostensibly intend to make consumers or workers better off, but the cost of regulation usually is borne by the same consumers and workers, reducing their ranges of choice; it therefore crowds out private spending. The crowding out effect can be particularly detrimental for low-income households. This special issue explores the various ways in which regulation may have such regressive effects as well as the political determinants of how regulation, despite its unfavorable consequences for low-income households, may come about.

Ludwig von Mises on war and the economy



Abstract: In 1919, in the wake of the Central Power’s defeat in World War I, Ludwig von Mises published his second book, Nation, State, and Economy. The book explores the consequences of war and the type of political and economic arrangements likely to generate a lasting peace in the future. This paper reviews the book’s key themes regarding the relationship between war and the economy. We make connections between Mises’ insights and contemporary literature in order to demonstrate the continuing relevance of Nation, State, and Economy a century after its publication.

The efficiency of regulatory arbitrage



Abstract: Classic public choice skepticism about the regulatory state, based on theories of rent-seeking, rent extraction and regulatory capture, is based on the unrealistic, and usually unstated, assumption of a monopolist regulator. In practice, the regulatory state is polycentric, involving numerous quasi-independent agencies with overlapping responsibilities. This has led to a more optimistic picture based on the idea of regulatory arbitrage: when firms can, to some extent, pick and choose their preferred regulator, regulatory agencies are constrained to deliver relatively efficient regulatory policies. In our view, this optimism is also unrealistic. We build a family of models that explores the possible regulatory outcomes, and use some aspects of Gordon Tullock’s critique of the common law as a conceptual foundation for the analysis of the efficiency of a polycentric regulatory system.

Do dictatorships redistribute more?



Abstract: This paper examines the effect of political institutions on fiscal redistribution for a country-level panel from 1960–2010. Using data on Gini coefficients before and after government intervention, we apply a measure of effective fiscal redistribution that reflects the effect of taxes and transfers on income inequality. Our findings clearly indicate that non-democratic regimes demonstrate significantly greater direct fiscal redistribution. Subsequently, we employ fiscal data in an attempt to enlighten this puzzling empirical finding. We find that dictatorial regimes rely more heavily on cash transfers that exhibit a direct impact on net inequality and consequently on the difference between market and net inequality (i.e., effective fiscal redistribution), whereas democratic regimes devote a larger amount of resources to public inputs (health and education) that may influence market inequality but not the difference between market and net inequality per se. We argue that the driving force behind the observed differences within the pattern on government spending and effective fiscal redistribution is that democratic institutions lead survival-oriented leaders to care more for the private market, and thus to follow policies that enhance the productivity of the whole economy.

Tullock and the welfare costs of corruption: there is a “political Coase Theorem”



Abstract: Gordon Tullock developed an approach to understanding dynamic processes of political change and policy outcomes. The key insight is the notion that political insiders have a comparative advantage—because they face lower transaction costs—in manipulating rules. The result is that political actors can collect revenues from threatening to restrict, or offering to loosen, access to valuable permissions, permits, or services. To the extent that the ability to pay for such favorable treatment is a consequence of private activities that produce greater social value, there is a “political Coase theorem”: corruption makes bad systems more efficient. But the dynamic consequences are extremely negative, because of the inability to institute reforms resulting from application of Tullock’s “transitional gains trap.”

Fired Up by Morality: The Unique Physiological Response Tied to Moral Conviction in Politics



Abstract: Studies provide mounting evidence that morally convicted attitudes elicit passionate and unyielding political responses. Questions remain, however, whether these effects occur because moral conviction is another strong, versus a distinctly moral dimension of attitude strength. Building on work in moral psychology and neuroscience, I argue that moral conviction stems from a distinctive mode of mental processing that is tied to automatic affective reactions. Testing this idea using a lab experiment designed to capture self‐reported moral conviction and physiological arousal, I find that conviction about political objects positively predicts arousal evoked by the objects, while attitude extremity and importance do not. These findings suggest that moral conviction items do tap into moral processing, helping to validate the conviction measure. They also illustrate the value of using physiological indicators to study politics, help explain why morally convicted attitudes trigger such fervent responses, and raise normative questions about political conflict and compromise.