For a Kinder, Gentler Society
The Federalist Papers and the New Institutionalism
(Vol. 2 in the Agathon series on representation)
  • Bernard Grofman et al.
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The Federalist Papers and the New Institutionalism. (Vol. 2 in the Agathon series on representation)
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The Madisonian approach to institutional design, as set forth in The Federalist Papers, is examined from the point of view of leading theorists of the "public choice" school who see themselves as the political heirs of that earlier legacy.

About the Author

The editor, Bernard Grofman, is an authority on American politics, comparative election systems, and social choice theory. He has served as an expert witness or court-appointed consultant in state legislative and congressional lawsuits in 11 states. Grofman has been a Professor of Political Science at the University of California–Irvine since 1980. He has been a fellow at the Center for Advanced Study in the Behavioral Sciences, Stanford, visiting professor at the University of Michigan and at the University of Washington, and guest scholar at the Brookings Institution, and at a number of universities outside the U.S. His past research has dealt with mathematical models of group decision making, legislative representation, electoral rules, and redistricting. He has also been involved in modeling individual and group information processing and decision heuristics, and he has written on the intersection of law and social science, especially the role of expert witness testimony and the uses of statistical evidence. Currently he is working on comparative politics and political economy. He is co-author of two books published by Cambridge University Press and co-editor of 15 other books; he has published over 200 research articles and book chapters. Professor Grofman is a past president of the Public Choice Society. He is a co-recipient (with Chandler Davidson) of the Richard Fenno Prize of the Legislative Studies Section of the American Political Science Association for best book published in 1994 in the field of legislative studies (Quiet Revolution In The South) and is a Fellow, American Academy of Arts and Sciences.

About the Book
Bernard Grofman taught a course on representation in which the readings included both the Federalist Papers and Buchanan and Tullock‘s Calculus of Consent. In teaching that course (and, as he writes, forcing himself to...
Bernard Grofman taught a course on representation in which the readings included both the Federalist Papers and Buchanan and Tullock‘s Calculus of Consent. In teaching that course (and, as he writes, forcing himself to reread the Federalist carefully for the first time since his own graduate student days), his admiration for its authors, already high, grew even higher. Convinced that theorists of the “public choice” school were the natural heirs to the Federalist legacy, he was inspired to invite other scholars to contribute to this volume of articles.

The new institutionalists of the public choice school are, Grofman says, the natural heirs to Madisonian political theory, but the features of Madisonian theory are almost entirely absent from the public choice literature: the role of deliberation and rational persuasion, a concern for justice and the search for the public good, and a respect for civic virtue and civic education. In that vision, institutions really do matter.

Contemporary theorists of the “new institutionalism” have at their disposal powerful analytic tools which can be used to reformulate and clarify classic issues in political theory. A leading traditional political theorist wrote that public choice modelers needed to rediscover the Constitution (Mansfield, 1987, 41). This volume is intended as a first start in that direction.


Bernard Grofman

By the new institutionalism, I mean analyses using tools derived from microeconomics, game theory, and social choice of the effects of decision-making rules and institutional structures on outcomes. Central to the new institutionalism is the idea that preferences...

Bernard Grofman

By the new institutionalism, I mean analyses using tools derived from microeconomics, game theory, and social choice of the effects of decision-making rules and institutional structures on outcomes. Central to the new institutionalism is the idea that preferences can only be understood in the context of the institutionally generated incentives and institutionally available options that structure choice (see, e.g., Schwartz, this volume; Fink and Riker, this volume). In particular, in John Ferejohn’s apt phrase, preferences for outcomes condition preferences for institutions.

I see six major foci of work on the new institutionalism, of which five are exemplified by at least one chapter in this volume: efficiency and transaction costs (Wittman); stability (Miller and Hammond); coordination (Hardin); distribution of power or other resources (grams; Chamberlin; and Schwartz); and representation (Cain and Jones; Chappell and Keech; Page and Shapiro; and, in a one special sense of that term, agency, Schwartz).

The sixth focus, procedural fairness, refers to criteria by which rules for preference aggregation and group decision-making might be judged: for example, consistency, and responsiveness to change in voter preferences. In its contemporary form it springs from the seminal work of Arrow (1963). A comprehensive, though rather technical, review is found in Schwartz (1986); a less technical but now somewhat dated review is found in Plott (1976). (See also Sen, 1970.)

As economists use the term efficiency (also called Pareto optirnality) they refer to a distribution of resources from which no further gains can be made by trade. In other words, an outcome is efficient if no one can be made better off without at the same time making at least one person worse off.3 A great deal of work has been done in law and economics asserting the efficiency of common law practices, especially those in torts (see, e.g., Posner, 1981). Another sizable body of literature takes off from the work of Coase (1960), on the one hand, and Buchanan and Tullock (1962), on the other. The former deals with allocations in a fictionless environment; the latter emphasizes the importance of transaction costs. In this volume, Wittman draws on the transaction costs literature and on hypotheses from the Federalist Papers to look at inter-actor bargaining among sectors within the government.

As the term stability is customarily used in the social choice literature, it refers to an equilibrium outcome which cannot be overturned by any majority coalition of actors. There is a considerable literature-originating with Condorcet (1785) and continuing with Black (1958) and Arrow (1963), down to more recent work by scholars such as Plott (1967), Kramer (1977), McKelvey (1976, 1979), Schofield (1978), Shepsle (1979), and Shepsle and Weingast (1984)-which looks at conditions under which stability can be e~pectedI.n~ this volume, Miller and Hammond reexamine bicameralism from the perspective of its contributions to stability.

The idea of coordination refers to the ability of a disparate set of individuals to choose actions which are mutually complementary and which result in net gains for each in the long run. The most familiar example is the agreement to observe the rules of the road. While it is essentially arbitrary whether cars should drive on the right or the left, it is very helpful to everyone, to put it mildly, if everyone picks the same side. Other examples include the coordinating role of customs such as conversational ”turn-taking” and agreements such as the Geneva Convention for the treatment of prisoners of war or binding arbitration procedures for labor-management dispute resolution (Wittman, 1982). Research on regulation falls into this area.

The problem of coordination is closely related to the problem of “collective action” (Olson, 1965; Hardin, 1982a), where, as in the prisoner’s dilemma game, what is in the interests of each individual to do may lead to outcomes that no individual wants. Agreed-upon rules, and sanctions for their violation, allow for efficient outcomes in situations where the outcomes are determined by the choices of more than one actor. In this volume, Hardin argues that agreement upon a constitution can be thought of as a solution to the coordination problem which does not require an external sanction for its enforcement.

The status quo is anchored by the transaction costs involved in creating an alternative regime. Moreover, rather than merely being the solution to a particular prisoner’s dilemma game, a constitution specifies rules for the resolution of virtually all collective choice problems both at the time of its adoption and in the future.

The general problem of the effect of decision procedures on resource distribution (or redistribution) is one widely considered in economics. The term power, as customarily used in the game theory literature, however, has a quite precise meaning. It refers to the ability of actors to exercise a decisive vote. An actor is decisive if changing his or her vote (or preference) changes the outcome. Most game-theoretic measures of power treat an actor’s power as the percentage of situations in which that actor can be expected to be decisive. An important issue from the new institutionalist perspective is the way in which institutional arrangements (such as voting rules) affect the relative power of different actors. In this volume, Brams addresses the relative power of the two chambers of Congress, a question discussed in the Federalist nos. 58 and 63. Brams also looks at the relative power of Congress vis-a-vis the President.

Representation has had two closely related usages in the public choice literature. In the law and economics literature, it refers to “principal-agent” relationships, where a key issue is how incentives for the agent may lead to choices that diverge from the desires or interests of the principal. On the other hand, in the political science literature, it usually refers to the concordance between the choices made by a representative and the preferences of his or her constituents. Here, the most important early work is that of Downs (1957).

However, in the political science literature, just which voter or voters correspond to the “principal” is not clear. Sometimes the principal is taken to be the ”median voter.”

There has been a renewed interest in political science in the idea of representation in both senses of that term (see, e.g., Sugden, 1984; McCubbins and Schwartz, 1984; Feld and Grofman, 1986; Greenberg and Shepsle, 1987), but only some of this interest is traceable to a public choice influence (see, e.g., Grofman, 1975; Lengle, 1981; Grofman et al. 1982; Polsby, 1983; Lijphart, 1981; Lijphart and Grofman, 1984; Grofman and Lijphart, 1986).

A number of authors in this volume look at issues of representation both from the perspective of James Madison and from a contemporary public-choice perspective….

Table of Contents
The Federalist Papers and the New Institutionalism: An Overview (Bernard Grofman) Part I. The Madisonian Vision and the Theory of Public Choice: Com
The Federalist Papers and the New Institutionalism: An Overview (Bernard Grofman)
Part I. The Madisonian Vision and the Theory of Public Choice: Comparisons and Contrasts: Introduction (Bernard Grofman); 1. Madison's Theory of Contrasts (Bruce E. Cain and W. T. Jones, California Institute of Technology); 2. Publius and Public Choice (Thomas Schwartz, UCLA); 3. Electoral Institutions in The Federalist Papers: A Contemporary Perspective (Henry Chappell, Jr., University of South Carolina, and William Keech, University of North Carolina); 4. Restraining the Passions of the Public (Benjamin Page, Northwestern University, and Robert Shapiro, Columbia University)
Part II. Optimal Institutions: Introduction (Donald Wittman); 5. The Constitution as an Optimal Social Contract: A Transaction Cost Analysis of The Federalist Papers (Donald Wittman); 6. Stability and Efficiency in a Separation-of-Powers Constitutional System (Gary Miller, Washington University, and Thomas H. Hammond, Michigan State University); 7. Why a Constitution? (Russell Hardin, University of Chicago)
Part III. Power: Checks and Balances: Introduction (Bernard Grofman); 8. Are the Two Houses of Congress Really Coequal? (Steven J. Brams, New York University); 9. Assessing the Power of the Supreme Court (John R. Chamberlin, University of Michigan); 10. Checks, Balances and Bureaucratic Usurpation of Congressional Power (Thomas Schwartz); 11. The Distribution of Power in the Federal Government: Perspectives from The Federalist Papers--A Critique (Mark P. Petracca, University of California, Irvine)
Part IV. The Ratification Debate: Introduction (Donald Wittman); 12. Public Choice Analysis and the Ratification of the Constitution (Robert McGuire, University of California, Davis, and Robert Ohsfeldt, Arizona State University); 13. Constitutional Conflict in State and Nation (Cheryl Eavey, Florida State University, and Gary Miller); 14. The Strategy of Ratification (Evelyn Fink, Dartmouth College, and William Riker, University of Rochester)
References and Author Index, Subject Index

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Pages 296
Year: 1989
LC Classification: JK155.F43
Dewey code: 328.73'0734-dc19
BISAC: POL006000
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