We argue that the future of Austrian political economy rests on the study of how institutional entrepreneurs discover and implement alternative institutional arrangements conducive to economic growth. This requires a dual level of analysis in spontaneous order studies.
Many states have certificate-of-need regulations, which prohibit hospitals, nursing homes, and ambulatory surgical centers from entering new markets or making changes to the existing capacity of medical facilities without first gaining approval from certificate-of-need regulators.
Standard macro theories have the same analytical structure as their micro counterparts. Where micro theories work with equilibrium between supply and demand for particular products, macro theories work with equilibrium applied to aggregates of products. In contrast, we pursue a systems-theoretic approach to the micro-macro relationship.
The governments of American states often attempt to incentivize businesses to locate within their
borders by offering targeted benefits to particular industries and companies. These benefits come
in many forms, including business tax credits for investments, property tax abatements, and
reductions in the sales tax. Despite good intentions, policymakers often overlook the unseen and
unintended negative consequences of targeted-benefit policies. This paper analyzes two major
downsides of these policies: (1) they lead to a misallocation of resources, and (2) they encourage
rent-seeking and thus cronyism. We argue that these costs, which are often longer-term and not
readily observable at the time the targeted benefits are granted, may very well outweigh any
possible short-term economic benefits.
When considered as a unified project, the Ostroms’ themes of polycentricity, self-governance, and the art and science of association have strong intellectual roots and connections with Austrian economics. In this paper, we show the close relationship between the Ostroms and the Austrians.
This chapter argues that the ambiguous bifurcation in Frank Knight’s understanding of economics would manifest itself through the divergent paths in the earlier writings of his students Milton Friedman and James Buchanan. It argues that despite Friedman’s stature in the scientific elite of the profession of economics, the stronger argument for the classical liberal order is found in Buchanan’s work.
Recent market events like the “flash crash” of 2010, algorithmic failures at Knight Capital, and the release of Michael Lewis’s book Flash Boys (2014)—with his claims that markets are “rigged”—have heightened scrutiny of high-frequency trading (HFT) and increased demands for more aggressive regulation. However, HFT has several empirically demonstrated benefits, and the current, largely qualitative arguments against it call for careful scrutiny of proposed regulations.
This paper analyzes how foreign interventions can result in a broadening of government powers and a concurrent reduction of citizens’ liberties and freedoms domestically. The authors develop an analytical framework to examine the effects of coercive foreign interventions on the scope of domestic government activities. Facing limited or altogether absent constraints abroad, coercive foreign interventions serve as a testing ground for domestically-constrained governments to experiment with new technologies and methods of social control over foreign populations.
This paper presents the results of the Mercatus Center’s Small Bank Survey, which include responses from approximately 200 banks across 41 states with less than $10 billion in assets each, serving mostly rural and small metropolitan markets.
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.
When most people think of prison gangs, they think of chaotic bands of violent, racist thugs. Few people think of gangs as sophisticated organizations (often with elaborate written constitutions) that regulate the prison black market, adjudicate conflicts, and strategically balance the competing demands of inmates, gang members, and correctional officers.