Working Paper No. 3. Constitutionalism, Division of Power and Transaction Costs
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According to many democracy theorists, there is an unavoidable trade-off between constitutionalism and the need for political action. This paper criticizes that belief. Rather, it argues that a division of power, while sometimes entailing high political transaction costs, can nevertheless be beneficial and that it is not necessarily the case that a division of power does entail high transaction costs. The analysis expands the framework of Buchanan and Tullock (1962). Constitutionalism is thus defended against one of its main perceived deficiencies: its bringing about gridlock. This does not always happen, and when it does, it is often a good thing.
Related content: Constitutionalism, Division of Power, and Transaction Costs
Berggren, N. & Karlson, N. (2002). Constitutionalism, Division of Power and Transaction Costs. Ratio Working Paper No. 3.