February 19, 2014

James Buchanan's Contributions to Constitutional Political Economy, Institutional Analysis, and Self-Governance

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Find the full paper at SSRN.com.

We outline the work of James Buchanan and his influence and contributions to political economy, institutional analysis, and self-governance. In addition to pioneering the public choice movement, we argue that Buchanan’s greatest contribution to political economy was initiating the constitutional level of analysis in economics. In doing so, we highlight Buchanan's main emphasis on the elementary principles of economics and how they fit into the broader agenda of economist as teacher and enabler of improving the democratic process; the role of economists as studying exchange; the reconciliation of the economists’ zeal for reform with positive economic theory and how this notion advances the importance of constitutional-making from the bottom-up; and finally, the introduction of the main puzzle in political economy regarding constitutional constraint. We argue that it is in the broader field of development economics and self-governance research that his ideas concerning the “rules level of analysis” can have its deepest impact.