This paper studies the long-run fiscal consequences of balanced budget rules (BBR) that are enshrined in a country's constitution. Using historical data dating back to the 19th century and applying a difference-in-difference approach we find that the introduction of a constitutional-BBR reduces...

James Buchanan's protective state emerges at the constitutional level and protects the core rights of citizens via internal security, contract enforcement, and defense against external threats. This paper focuses on the potential for the protective state to produce anti-liberty outcomes. I...

We provide a new framework to account for the diverging paths of political development and state building in China and Japan during the second half of the nineteenth century. The arrival of Western powers not only brought opportunities to adopt new technologies, but also fundamentally threatened...

This is a review essay on Vito Tanzi's "Government versus Markets: The Changing Economic Role of the State." The bulk of this book looks backward on the relative growth of government from late in the 19th century until recent times when that growth seems to have stopped in many places. Tanzi...

n the midst of the current financial crisis the economics profession has seen a monumental resurrection of Keynesian ideas. The debate, which Keynes started back in the 1930s, is being picked up again, not where it left off, but in exactly the same place it started. While Keynesian theories were...

To what extent are the outcomes of economic regulation intended and desired by its proponents? To address this question, we combine Stigler’s theory of regulatory capture with the Austrian theory of the dynamics of interventionism. We reframe Stigler’s theory of regulatory capture as an...

From the 19th century to the 1940's, Quebec remained poorer and less economically developed than the rest of Canada in general and poorer than Ontario in particular. This placed Quebec at the bottom of North American rankings of living standards. One prominent hypothesis for the initiation of...

What is the relationship between state capacity, national identity, and economic development? This paper argues that increases in state capacity can lower the collective action costs associated with political and economic exchange by encouraging the formation of a common identity. This...

This study exploits the confiscation and auctioning off of Church property that occurred during the French Revolution to assess the role played by transaction costs in delaying the reallocation of property rights in the aftermath of fundamental institutional reform. French districts with a...