Peter Leeson, Adam C. Smith, Daniel Houser, Ramin Ostad |
Violent conflict destroys resources. It generates “destruction costs.” These costs have an important effect on individuals’ decisions to cooperate or conflict. We develop two models of conflict: one in which conflict's destruction costs are independent of individuals’ investments in “arms”—the tools of conflict—and another in which conflict's destruction costs depend on those investments. Our models demonstrate that when conflict's destruction costs are arms-dependent, conflict is more costly, making cooperation more likely.
This paper develops a critique of the single-tax proposal of Henry George. We present a simple search-theoretic model for the discovery of natural resources and show that a tax on the unimproved value of land is distortionary.
Despite purporting to have appropriated Hayek’s thought by acknowledging the information-transmitting role of prices, mainstream economists have missed Hayek’s point. The predominant tool of formal economics—equilibrium analysis—begins by assuming the data held by actors to have been pre-reconciled, and so evades the problem to be solved. Even the more advanced tools for modeling knowledge in economic analysis, such as the economics of information, assume away either the subjectivism of knowledge and expectations (rendering the coordination of beliefs and plans a trivial matter) or the frictions and “imperfections” of reality (rendering the coordination problem indeterminate).
How does the permanent war economy interact, and subsume, the private, non-military economy? Can the two remain at a distance while sharing resource pools? This forthcoming paper argues that they cannot.
More than 40 years ago, Elinor Ostrom began her adventures with the police. In order to combat the conventional view that ‘bigger means better’, Ostrom pioneered a fieldwork-based framework for measuring police services that utilized consumer surveys and thereby created a community-centered model of analysis for public services.
This paper analyzes the political economy of the Reconstruction Era’s (1865–1877) race riots through the economic logic of rules. The central argument is that the race riots were not an inevitable outcome at the end of the Civil War, but instead occurred because of the absence of effective rules to raise the cost of engaging in violence.
Led astray by Marxist and Keynesian dogma, the literature on the origins of the permanent war economy has overlooked a leading cause of the elevated levels of U.S. military spending since the end of World War II: the economic rents created by the federal government’s monopoly on national defense, and the pursuit of those rents by the labor, industry, and military lobbies. Although the permanent war economy benefits powerful special interest groups, it generates a significant negative externality by diverting resources from other, private uses.
We argue that in order to answer the challenges that James Buchanan put to contemporary political economists, a reconstruction of public choice theory building on the work of Buchanan, F.A. Hayek and Vincent Ostrom must take place. Absent such a reconstruction, and the significant challenges that Buchanan raised will continue to go unmet.
Investigations of a society's competitiveness aim to trace the causal mechanisms behind patterns in wealth and poverty across societies. This paper argues that to be productive such investigations must be comparative, historical, and political economic in nature. Comparative historical political economy is how social scientists generate useful knowledge about the wealth and poverty of nations. Our contribution is a methodology – or rather a collection of methodologies – for understanding national competitiveness and attempts to improve it: one focuses on political-economic analysis, another on historical analysis, and a third on comparative analysis.
For 250 years insects and rodents accused of committing property crimes were tried as legal persons in French, Italian, and Swiss ecclesiastic courts under the same laws and according to the same procedures used to try actual persons. I argue that the Catholic Church used vermin trials to increase tithe revenues where tithe evasion threatened to erode them.
Mercatus PhD Fellow Vipin Veetil, along with Akshaya Vijayalakshmi and Srikanth Viswanathan, address Amartya Sen's criticism of cash-transfer programs such as education vouchers in the Wall Street Journal.
In 1964 James Buchanan famously asked “What Should Economists Do?” He argued that economists should focus their intellectual attention on exchange and the institutions within which exchange takes place. This paper reflects on Buchanan’s message and looks at the development of that argument, and its implications in the wake of post-socialist political economy on the one hand, and the post-financial crisis of 2008 on the other.