Incentives and political economy / Jean-Jacques Laffont.

Format:

Book

Author/Creator:

Laffont, Jean-Jacques, 1947-

Series:

Clarendon lectures in economics.

Clarendon lectures in economics

Language:

English

Subjects (All):

Economics.

Policy sciences.

Physical Description:

xii, 257 p. : ill.

Edition:

1st ed.

Place of Publication:

Oxford ; New York : Oxford University Press, 2000.

Summary:

Incentives and Political Economy constructs a normative approach to constitutional design using recent developments in contract theory. It treats political economy as the study of the incentive problems created by the delegation of economic policy to self-interested politicians. Politicians are treated successively as informed supervisors or residual decision-makers. The optimal constitutional responses to the activities of interest groups are characterizedin various circumstances, as well as the optimal trade-off between flexibility of decision-making and discretion to pursue personal agendas when the incompleteness of the constitutional contract is recognized.

Contents:

Intro

Contents

Preface

Acknowledgements

1. Introduction

1.1 Political Economy with a Benevolent Monarch

1.2 The Design of Democratic Institutions

1.3 Political Economy in Democratic Countries

1.4 The Chicago View of Interest Group Politics

1.5 The Complete Contracting Approach

1.6 The Incomplete Contracting Approach

1.7 Adding Asymmetric Information

1.8 Endogenous Coalition formation

I: Politicians as Informed Supervisors

2. The Complete Contract Approach to Constitutional Design

2.1 Introduction

2.2 A Simple Supervision Model

2.3 Optimal Incentives for the Politician

2.4 Conclusion

Appendix 2

3. An Incentive Theory of the Separation of Powers

3.1 Introduction

3.2 Separation of Powers and Yardstick Competition

3.3 A Model with Three Types

3.4 Single Non-benevolent Politician

3.5 Separation of Politicians

3.6 Generalization of the Results

3.7 Conclusion

Appendix 3

4. Checks and Balances

4.1 Introduction

4.2 The Model

4.3 Optimal Symmetric Constitution

4.4 Supervision and Division of Tasks

4.5 Multidimensional Collusion Activities

4.6 A Model with Three Politicians

4.7 Optimal Supervisory Structures

4.8 Conclusion

Appendix 4

II: Flexibility Versus Discretion in Constitutional Design

5. Political Economy and Industrial Policy

5.1 Introduction

5.2 Political Interference in the Rent-Efficiency Trade-off

5.3 Ownership Matters

5.4 Incentives against Capture as a Constitutional Rule

5.5 Political Price Discrimination Versus Uniform Pricing

5.6 Information Asymmetries, Costly Redistribution and the Cost of Democracy

5.7 Conclusion

Appendix 5

6. Political Economy and the Marginal Cost Pricing Controversy

6.1 Introduction

6.2 The Marginal Cost Pricing Rule

6.3 Frisch's Comment.

6.4 Smith, Edgeworth, Hotelling

6.5 Project Selection and Pricing Rules

6.6 Conclusion

Appendix 6

7. Toward a Political Theory of the Emergence of Environmental Incentive Regulation

7.1 Introduction

7.2 The Basic Model

7.3 Controlling the Discriminatory Power of Politicians through Constraints on the Choice of Instruments

7.4 Delegating Discriminatory Power to the Politicians

7.5 Multiple Privately Informed Interest Groups

7.6 Conclusion

Appendix 7

III: Coalition Formation and Constitutional Design

8. Optimal Constitutional Response to Coalition Formation

8.1 Introduction

8.2 The Model

8.3 Modeling Collusion

8.4 Collusion under Complete Information

8.5 Collusion under Complete Information with Extended Mechanisms

8.6 Collusion under Incomplete Information

8.7 Conclusion

Appendix 8

9. Collusion and Decentralization

9.1 Introduction

9.2 The Independent Case

9.3 The Independent Case with Limits on Communication

9.4 Risk Aversion

9.5 Conclusion

10. Concluding Remarks

Appendix. Translations of Passages Quoted in French

References

Index

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

Y

Z.

Notes:

Includes bibliographical references (p. [231]-242) and index.

Description based on metadata supplied by the publisher and other sources.

Description based on publisher supplied metadata and other sources.

ISBN:

0191522228

9780191522222

OCLC:

310754321