Prof.
Bryan Caplan
bcaplan@gmu.edu
http://www.bcaplan.com
Econ
854
Course
Focus:
This is a research-oriented course in public choice, also
known as political economy, economics of politics, and rational choice
theory. It introduces students to
basic concepts and debates in public choice, including the logic of collective
action, the Median Voter Model, information, bargaining, competition, and
constitutions. But its main goal is
to take students up to the research frontier, with a focus on what I think of
as “cutting edge” topics: empirical public opinion research,
ideology, Wittman's critique of the political failure literature, expressive
voting, voter irrationality, behavioral political economy, dictatorship, and
anarchy.
Prerequisites:
I assume that you have taken Public Choice I (Econ 852),
and are familiar with basic calculus and econometrics.
Texts:
Most of the course material will consist in detailed notes
that will be handed out in class. There are eight required texts:
Gordon Tullock, The
Social Dilemma
Robert Cooter, The
Strategic Constitution
Free version at:
http://www.law.berkeley.edu/faculty/cooterr/PDFpapers/stratcon.PDF
Michael Delli Carpini and Scott Keeter, What Americans Know About Politics and Why
It Matters
Geoffrey Brennan and Loren Lomasky, Democracy and
Decision
Donald Wittman, The Myth
of Democratic Failure
Bryan Caplan, The Myth
of the Rational Voter
Scott Althaus, Collective
Preferences in Democratic Politics
David Friedman, The
Machinery of Freedom (2nd edition)
Hard-to-get-online readings are marked with a *, and will
be handed out in class.
All other readings should be accessible with a GMU email address
from scholar.google.com, or remotely from library.gmu.edu’s e-Journals
link.
Grading
and Exams:
There will be one midterm and a final exam. The
midterm counts 35%; the final exam is 45%; homework counts for the remaining
20%. These weights are fixed - improvement on later exams will not
retroactively raise your grades on earlier exams.
There is no formal grade for participation, but if you are
one of the students who (in my judgment) contributes most to the quality of
class discussion you will be "bumped up" a fractional grade (e.g. B-
to B).
Homework:
There will be four homework assignments during the
semester. Depending upon how good a job you do,
your homework will receive a check-plus (4 points), a check (3 points), or a
check-minus (2 points) if you turn it in; otherwise you receive 0 points.
Late homework loses one point. Late homework is no longer accepted
after I pass out my suggested answers for a given assignment.
Office Hours
The best way to contact me is by email at
bcaplan@gmu.edu. Many questions and requests can be satisfied by going to
my homepage at http://www.bcaplan.com. My office is 11 Carow Hall; my
office number is 3-2324. My official office hours are MW 1:30-3:00, but
you can also schedule an appointment or just drop by and see if I’m
available.
Tentative
Schedule:
My proposed schedule for the
semester follows. If it proves too ambitious, I will try to simply say
less about each topic rather than cut the topics for the final weeks.
Week 1: The Logic of Collective
Action
·
Pareto efficiency
·
Kaldor-Hicks efficiency and
deadweight costs
·
The comparative institutions
approach and "second best"
·
Private versus social benefits and
costs
·
Negative externalities and
"public bads"
·
Positive externalities and
"public goods"
·
Bad but popular examples; good but
unpopular examples
·
Fallacies of group action
·
Individual impact: probability and
magnitude
·
Calculating the probability of
electoral decisiveness
·
Empirical evidence on collective
action problems
Readings:
Brennan and Lomasky, pp.54-65
Tullock, pp.174-85
Week 2: Voting, I: The Basics
·
Rational, instrumental voting
·
Single-peaked preferences
·
Two-party, winner-take all elections
·
Political competition and platform
convergence
·
Voter participation and franchise
restrictions
·
The effect of fringe parties
·
Multi-peaked preferences
·
Individual and social intransitivity
·
Multiple voting dimensions
·
Tiebout and inter-governmental
competition
·
Some perverse incentives of
non-profit competition
·
Federalism: for and against
Readings:
Cooter, chapters 2, 6
Week 3: Voting, II: Information and
Bargaining
·
The economics of imperfect
information
·
Political knowledge and rational
ignorance
·
Empirical evidence on political
knowledge
·
Informed voting as a public good
·
Education and voter ignorance
·
Other group differences in political
knowledge
·
Voter ignorance, principal-agent
problems, and optimal punishment
·
The principle of aggregation
·
Voter ignorance and the
"miracle of aggregation"
·
Uncertainty and platform convergence
·
Divergence between median and mean
preferences on a single dimension
·
Log-rolling, bargaining, and the
Coase theorem
·
Bargaining to efficiency on one
dimension
·
Bargaining to efficiency on multiple
dimensions
·
Bargaining around intransitivity
·
Pork barrel politics
·
Restrictions on political
competition: supermajority rules, term limits, spending limits
Readings:
Delli Carpini and Keeter, pp.68-95,
142-147, 154-161, 188-209
Cooter, chapter 3
Week 4: Voter Motivation, I:
Selfish, Group, and Sociotropic Voting
·
Is the median voter model correct?
·
The self-interested voter hypothesis
(SIVH)
·
The Meltzer-Richards model
·
Empirical evidence on the SIVH
·
Sociotropic voting
·
Group-interested voting
·
Gelman on income and voting
·
The SIVH versus the logic of
collective action
Readings:
Meltzer, Allan, and Scott
Richard. 1981. "A Rational Theory of the Size of
Government." Journal of Political Economy 89, pp.914-27.
Peltzman, Sam. 1985.
"An Economic Interpretation of the History of Congressional Voting in the
Twentieth Century." American Economic Review 75, pp.656-75.
* David Sears and Carolyn Funk,
"Self-Interest in Americans' Political Opinions"
Green, Donald, and Ann Gerken.
1989. "Self-Interest and Public Opinion Toward Smoking Restrictions
and Cigarette Taxes." Public Opinion Quarterly 53, pp.1-16.
Andrew Gelman et al.
2007. “Rich State, Poor State, Red State, Blue State: What’s the Matter
with Connecticut?” Quarterly
Journal of Political Science 2, pp.345-67.
Week 5: Voter Motivation, II:
Ideological Voting
·
The dimensionality of U.S. political
opinion
·
Ideological voting
·
Education, ideology, income, and
opinion
·
Case study: the determinants of
party identification
·
Case study: the determinants of
economic beliefs
·
The ideology*education interaction
Readings:
Keith Poole, Howard Rosenthal.
1991. "Patterns of Congressional Voting." American Journal
of Political Science 35, No. 1, pp. 228-278.
Steven Levitt. 1996.
"How Do Senators Vote? Disentangling the Role of Voter Preferences,
Party Affiliation, and Senator Ideology." American Economic
Review 86, pp.425-41.
Delli Carpini and Keeter,
pp.242-258.
Week 6: Voter Motivation, III:
Miscellaneous
·
Religion
·
Personality
·
Genes
·
Mainstream and polarization effects
·
How well does policy match voter
preferences?
Readings:
Gerber et
al, “Personality
Traits and the Dimensions of Political Ideology” - http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1412863
Alford et al. 2005. “Are Political Orientations
Genetically Transmitted?” American
Political Science Review 99, pp.153-167.
* Zaller, The Nature and Origins
of Mass Opinion, pp.97-113
Larry
Bartels, “The Opinion-Policy Disconnect.” http://econfaculty.gmu.edu/bcaplan/bartels.pdf
Week 7: MIDTERM
Week 8: Wittman and Democratic
Failure
·
Critiques of the economic approach
·
Wittman's challenge to orthodox
public choice
·
"Extreme voter stupidity"
·
"Serious lack of
competition"
·
"Excessively high transactions
costs"
·
The effect of asymmetric political
information
·
Wittman's sampler: Responses to
diverse political failures
·
Validity versus soundness
Readings:
Wittman, chapters 1-4, 6-8, 11-14
Week 9: Expressive Voting
·
The instrumental voting assumption
·
Instrumental versus expressive value
·
Decisiveness revisited
·
Decisiveness and the relative prices
of instrumental and expressive voting
·
Expressive voting as political
pollution
·
Inefficient unanimity
·
Application: Environmentalism
·
Answering Wittman, I
Readings:
Brennan and Lomasky, chapters 1-3,
5-7
Week 10: Ignorance, Irrationality,
and Aggregation: Theory and Evidence
·
Return to the "miracle of
aggregation"
·
Ignorance, irrationality, and
systematic error
·
Rational ignorance versus rational
irrationality
·
Systematically biased beliefs about
economics
·
Group differences in economic
beliefs
·
Systematically biased beliefs about
other subjects?
·
The Enlightened Preference Approach
Readings:
Caplan, preface and chapters 1-5
* Mosca, The Ruling Class, chapter 7
Althaus, Collective Preferences in Democratic Politics, chapter 4
Week 11: Behavioral Political
Economy
·
Irrationality
in the median voter model
·
Application: Protectionism
·
The
efficiency of political irrationality
·
The interaction of voter motivation
and cognition
·
Supply side of politics
·
Irrationality and slack
·
Answering Wittman, II [include
exchanges]
·
Availability cascades
·
The idea trap
·
Government growth and crisis
Readings:
Caplan, chapters 6-7
Machiavelli, The Prince, chapters 14-19
Robert
Higgs. 1985. “Crisis, Bigger Government, and
Ideological Change: Two Hypotheses on the Ratchet Phenomenon.” Explorations
in Economic History 22, pp.1-28.
Tyler
Cowen, “Does Technology Drive the Growth of Government?”
http://www.mps2009.org/files/Cowen.pdf
Week 12: Dictatorship
·
The stationary bandit model
·
Constrained dictatorship
·
The paradox of revolution
·
The sociopathic bandit model?
·
Totalitarianism and economic
calculation
·
Democratic transitions
Readings:
Martin
McGuire and Mancur Olson.
1996. “The Economics
of Autocracy and Majority Rule.”
Journal of Economic Literature 34:
72-96.
Tullock,
pp.33-106, 186-224
Jones,
Benjamin, and Benjamin Olken.
2005. "Do Leaders
Matter? National Leadership and
Growth Since World War II." Quarterly Journal of Economics 120(3):
835-64.
Bryan
Caplan, “"Mises'
Democracy-Dictatorship Equivalence Theorem." 2008. Review
of Austrian Economics 21(1), pp.45-59.
Bryan
Caplan, “The Totalitarian Threat.” In Bostrum, Nick, and Milan
Ćirković, eds. Global Catastrophic Risks. Oxford:
Oxford University Press, pp. 504-519.
Weeks 13: Constitutions
·
The
comparative institutions approach revisited
·
Alternatives
to dictatorship and democracy
·
Are
constitutional politics different?
·
Constitutional
reform and endogenous institutions
·
Futarchy
Readings:
* Buchanan, Freedom in Constitutional Contract, pp.81-85.
Wittman,
chapter 10
Caplan,
chapter 8 and conclusion
Hanson,
Robin. “Shall We Vote on
Values, But Bet on Beliefs?” Journal
of Political
Philosophy,
forthcoming
Week 14: Anarchy
·
Economic arguments for government
·
The paradox of public good provision
·
Are the functions of the night
watchman state really public goods?
·
Dispute resolution as a private good
·
Rule formation as a private good
·
Enforcement as a private good
·
Moderate versus radical
privatization
·
Main objections to radical
privatization
·
Cowen, anarchism, and collusion
·
National defense
·
The transition problem
Readings:
Murray Rothbard, For a New
Liberty, pp.267-299,
http://mises.org/rothbard/foranewlb.pdf
David Friedman, The Machinery of
Freedom, pp.114-163, 201-218.
Tyler Cowen. 1992.
"Law as a Public Good." Economics and Philosophy 8,
pp.249-267.
Bryan Caplan and Edward
Stringham. 2003. "Networks, Law, and the Paradox of
Cooperation." Review of Austrian Economics 16(4), pp.309-26.
Bryan Caplan, “Persuasion,
Slack, and Traps: How Can Economists Change the World?” http://www.mps2009.org/files/Caplan.pdf