Working Group

Good Governance

Conveners: Gary Cox, Political Science, UCSD
Jean-Laurent Rosenthal Economics, UCLA

Working Papers
	Majoritarian Electoral Systems and Consumer Power Price Level Evidence From the OECD Countries Ronald Rogowski (UCLA) and Mark Andreas Kayser (Univeristy of Rochester)
	The Curley Effect by Edward L. Glaeser (Harvard University & NBER) and Andrei Shleifer (Harvard University & NBER)
	Biogeography and Long Run Economic Development by Ola Olsson (Goteborg University) and Douglas A. Hibbs Jr. (Goteborg University)
	The Evolution of Suffrage Institutions in the New World by Stanley L. Engerman (University of Rochester & NBER) and Kenneth Sokoloff (UCLA & NBER)

For 2000-2001 the working group will focus on growth of government. We will focus on two specific issues (1) The reform of political systems towards the provision of public goods, (2) Fiscal constraints and the efficiency of government.

The first theme is anchored by G. Cox's long standing interest in British politics. During the nineteenth century English politics evolved through a "great transformation" from a process dominated by private goods transactions (and the attendant organizational structures and transactions costs) to one dominated by public goods transactions (and a different set of organizations and transactions costs). We would like to explore if and how this transition takes place in other contexts. Further, its seems worthwhile to analyze what the transition entails. In Britain it required moving from one coordination equilibrium to another, meaning that lots of things had to change simultaneously. The reform prescription is that changing the most egregious single problem in a nation's politics will rarely succeed.

The second theme focuses on the fact that inefficient governments are frequently fiscally constrained. On the administrative side widespread corruption usually signal a lack of investment in monitoring officials. Constituents at the same time attempt to minimize the resources available to the inefficient executive. Hence the equilibrium of fiscal constraints, inefficient government, and low levels of public services can be self sustaining. On the other hand constituents who both provide their executive with resources and monitor them will generally receive higher levels of public services. We would like to explore what constraints prevent societies from moving from one regime to another. A preliminary hypothesis is that constituents often exercise more authority over revenue then they do over expenditures and hence an executive may prefer to be ill-funded and autonomous to being well funded but subject to the will of constituencies.

Our ambition is to examine these questions historically for countries like Britain, France or the US and in a comparative context with contemporary cases of government reform in developing and transition economies. We hope to gain a better understand of the difficulties of creating efficient governance structures and of the factors that might encourage such developments.