ECON 410: Public Choice

Public Choice is the application of economic theory to decision making in the political sphere. This introductory course explores the intellectual history and major themes of the subject as it has developed since the late 1950s.


Week 1: From Anarchy to the State

The first lecture of the course briefly explores the analogies between anthropological arguments for the emergence of states and modern, normative arguments in defense of them. It also addresses anarchist counterarguments in defense of purely voluntary association. The second lecture examines the early development of political concepts in Ancient Greece and Rome. (Lecture 1 Audio missing due to technical difficulties. Please see notes. Apologies!)


Week 2: Public Sector Economics, Pre-Public-Choice

This week's lectures examine the perspectives on government offered by economists before the emergence of public choice. They briefly cover traditional welfare economics, the notion of a stable social welfare function, Arrow's Impossibility Theorem, and related ideas.


Week 3: The Logic of Collective Action

Lecture 1 examines Duncan Black's and Anthony Downs' work on the median voter theorem and the paradox of voting; the intellectual influences and fundamental ideas behind Buchanan's and Tullock's The Calculus of Consent; and the trade-offs involved in the choice of decision making rules under democracy. Lecture 2 looks at the standard modeling assumptions which public choice economists employ when analyzing the behavior of voters, politicians, and bureaucrats.


Week 4: Three Schools of Thought in Public Choice

This week details three major schools of thought in public choice scholarship. Lecture 1 examines both Virginia Political Economy and Chicago Political Economy. Lecture 2 turns to new research in Behavioral Political Economy and Bryan Caplan's theory of Rational Irrationality.


Week 5: Voting Behavior

This week analyzes the debate between Bryan Caplan and Donald Wittman on the efficiency of democracy. Lecture 1 deals with the theoretical debate, including Caplan's theory of "rational irrationality." Lecture 2 examines the empirical evidence on voting behavior and its implications for the debate. [Lecture notes are heavily drawn from those of Bryan Caplan on voting, to which I refer the reader here.



Week 6: Constitutionalism and Federalism

Constitutional economics is introduced as a field of intellectual inquiry. The composition and aims of constitutionalism and federalist structures are examined. Lecture 1 focuses on constitutions as institutions and the veracity of James M. Buchanan's theories of the constitutional moment and constitutional veil of ignorance. Lecture 2 looks at two visions of federalism: one based on individuals and constitutional constraints, the other based on states' power.


Week 7: Law and Jurisprudence

Issues of law and jurisprudence are considered from a public choice perspective. In lecture 1, debates over the relative efficiency of common and civil law are considered, and special attention is paid to Gordon Tullock's defenses of civil law. The first part of lecture 2 turns to issues of legal systems and growth, examining both theory and empirical evidence. In the second part, we turn to public choice theories of judicial behavior.


Week 8: Bureaucracy

In lecture 1, we more thoroughly examine public choice theories of bureaucratic behavior and incentive structures. Competing visions of bureaucracy are presented through the arguments of G.F.W. Hegel and Ludwig von Mises. In lecture 2, we address the debate over bureaucratic versus legislative control in policy implementation. The relationship between bureaucracies and the legislators who oversee them is presented in the context of microeconomic models of bilateral monopoly.


Week 9: Regulation

In lecture 1, traditional arguments for regulation as a solution to market failures are discussed. The research agenda on regulation in public choice as initiated by George Stigler in the 1960s is detailed, along with subsequent developments by Sam Peltzman and Armen Alchian. In lecture 2, theoretical and empirical cases for the effects of regulation on macroeconomic growth are assessed and the "Iron Triangle" of the regulatory state is laid out.


Week 10: Entangled Political Economy

A broader attempt is made to integrate separate aspects of the state as covered in past weeks using Richard Wagner's theory of Entangled Political Economy. Lecture 1 summarizes Wagner's theory and arguments and the notion of political entrepreneurship. Lecture 2 examines his concepts of parasitical pricing and the role of economic calculation in dictating the flow of capital towards market or political enterprises.


Week 11: Public Goods

Explores debates over the provision of public goods, with particular emphasis on the difficulty of making categorical claims as to the efficiency of state relative to market provision of goods and services. Lecture 1 summarizes the nature of public goods as well as public and private means by which they are provided. Free rider problems are weighed against problems that arise in democratic decision making. In lecture 2, James M. Buchanan's theory of club goods and Elinor Ostrom's work on governing the commons are presented as offering valuable insights to voluntary provision of common property.


Week 12: Autocracy and Revolution

Public choice insights into the "social dilemmas" of autocracy, revolution, and conflict are examined. Lecture 1 examines the nature of autocratic decision making, presenting theories offered by Gordon Tullock as well as by Martin McGuire and Mancur Olson. Lecture 2 looks at economic considerations of incentives surrounding revolution and war.


ECON 415: Law and Economics

Law and Economics applies economic tools of analysis to understand the nature, causes, and effects of legal rules and institutions. This course explores both its theories and history of thought, beginning with the first treatments of the law by economists in the 18th century and proceeding into modern economic explorations of issues in property rights enforcement, contracts, torts, regulation, criminal law, family, international law, and the laws of war.


Week 1: What is Law and Economics

The first two lectures of this course lay out for students the variety of subjects which are included within the broader umbrella of Law and Economics. Economic axioms and contrasting notions of efficiency are explored which will be key to central debates in the field. A review of basic price theoretic tools is included, which the student is advised to use in considering the issues presented in later weeks. 


Week 2: Law and Economics, Pre-20th-Century

These lectures challenge the conventional view of Law and Economics as a purely 20th and 21st century phenomenon, tracing the origins of the field to the earliest works in economics. Legal themes in the works of Adam Smith, David Ricard, Jeremy Bentham, Cesare Beccaria, John Stuart Mill, Frederic Bastiat, and Jean Baptiste Say are discussed.


Week 3: Common versus Civil Law

The historical evolution of common law is briefly considered and the notion of competition in legal rulings is explored. In lecture 1, debates over the relative efficiency of common and civil law are considered, and special attention is paid to Gordon Tullock's defenses of civil law. The first part of lecture 2 turns to issues of legal systems and growth, examining both theory and empirical evidence.


Week 4: Judges and Juries

An economic approach is taken to assessing the institutional constraints and incentives at work in judicial and juridical decision making as well as to what extent judges and juries behave according to idealized notions of how we they should behave. Empirical evidence is presented on judicial discretion and the effects of various alternative means of selecting judges for office.


Week 5: A.C. Pigou and Welfare Economics

Traditional welfare economics, the notion of a stable social welfare function, Pigouvian taxes and subsidies, Arrow's Impossibility Theorem, and related ideas are examined as the backdrop against which Ronald Coase's work and the New Institutional Economics would later emerge. 


Week 6: Ronald Coase and the New Institutional Economics

Four of Ronald Coase's major papers are examined: "The Nature of the Firm," "The Problem of Social Cost," "The Marginal Cost Controversy," and "The Lighthouse in Economics." Unifying themes of Coase's body of work are discussed, along with their applications to real world policy debates and the challenges which they present to traditional welfare economics.


Week 7: Alchian, Demsetz, and Continuing the Coasean Tradition

Ronald Coase's framework of analysis is carried on to another generation as we examine the work of two more great economists: Armen Alchian and Harold Demsetz. From Alchian, we read "Some Economics of Property Rights." From Demsetz: "Toward a Theory of Property Rights" and "The Exchange and Enforcement of Property Rights." Finally, we read and discuss the most cited paper in the history of economics: "Production, Information Costs, and Economic Organization." The meaning of these papers to our understanding of property rights is considered at length.


Week 8: Torts

The economics of various liability standards are discussed, as are the use of punitive damages, the least-cost avoider principle, and issues in products liability. The costs and benefits of tort law and regulation are considered as competing means of assuring consumer safety. Tort reform proposals are discussed, as are the political effects of lawyers' level of representation among legislators.


Week 9: Contracts

Economic considerations of contract law are explored, including debates over strict performance, alternative monitoring and enforcement mechanisms, and the means by which underlying cost structures can influence choice between various potential contractual arrangements.


Week 10: Law and the Family

Gary Becker's work on marriage and the economics of the family forms the basis for this week's examination of family law. The economic determinants of various culture's choices between marriage and family structures are examined in historical context. Finally, contemporary evidence on determinants of divorce, child custody decisions, and life cycles of marriages are presented.


Week 11: Regulation and Administrative Law

Traditional arguments for regulation as a solution to market failures are discussed. Theoretical and empirical cases for the effects of regulation on macroeconomic growth are assessed. The creation and growth of administrative law in the 20th century is considered in the context of two rival perspectives: those of Woodrow Wilson and Friedrich Hayek. Friedman and Friedman's "Iron Triangle" model of the regulatory state is presented.


Week 12: Antitrust 

An introduction to economic debates over antitrust is offered. The divergence between legal rulings and economic evidence in landmark rulings such as Standard Oil Company of New Jersey v. United States (1911) is discussed. We enumerate the empirical limitations and difficulties of relying upon structural index measures of industry concentration and competitiveness. Finally, public choice issues regarding economists' roles as advisors and experts on economic policy are considered along with evidence on the potentially perverse influences of legislators on the initiation of antitrust suits.


Week 13: Crime and Punishment

The theoretical work of Cesare Beccaria and Jeremy Bentham on crime and punishment are reviewed, and Gary Becker's famous formula is considered against the backdrop of real world applications. The costs of mass incarceration are compared and contrasted with those of under-enforcement. The merits of the "Broken Window Theory" and its explanatory power are considered. The economics of prohibitions are examined, along with economic insights as to the structure of criminal organizations. Finally, the merits of various explanations for fluctuations in national crime rates are debated.


Week 14: International Law, Anarchy, and the Laws of War

International law is presented as an anarchical system which functions overwhelmingly according to voluntary enforcement and compliance, reputation, and well aligned incentives. John Umbeck's theory of the initial formation and distribution of property rights under anarchy is considered at length. International law and the laws of war among the Ancient Greeks and Romans are presented and examined as instances of alternative institutional arrangements arising from differing allocations of physical power and frequencies of interaction between polities.