Constitutional Economy

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Constitutional economics is a program of joint study of economics and constitutionalism and is often described as the "economic analysis of constitutional law".

It tries to explain the selection of constitutional provisions which are intended to “limit the options and the activity of economic and political institutions”. This differs from the traditional economics approach.

It also examines how well the economic decisions of the state align with the existing constitutional economic rights of its citizens.

Proper distribution of the state's economic and financial resources is a major problem for any nation. Here the constitutional economy should help to find a legal solution mechanism.

Genesis of the term

The term “constitutional economy” (better known in today's Germany as “new political economy”) was created in 1982 by the American economist Richard McKenzie. It was later used by another American economist - James M. Buchanan - as the name of a new academic branch. It was the work on this sub-discipline that earned Buchanan the 1986 Nobel Prize (for economics) for his "development of the contractual and constitutional foundations for the theory of economic and political decision-making processes".

Buchanan rejects any organic conception of the state as "the superior one in the wisdom of the citizens of this state". This philosophical position forms the basis of the constitutional economy. Buchanan believes that every constitution is made for generations of citizens. It must therefore be able to bring the interests of the state, society and every individual citizen into balance.

There is an important opinion from Ludwig Van den Hauwe that constitutional economics can be viewed as the modern "science of legislation".

The ever increasing public interest in constitutional economy has led to the establishment of several scientific journals, such as "Constitutional Political Economy" (founded in 1990).

Judicial interpretation

The American judge Richard Posner emphasizes the important role of the state constitution in economic development. He claims that "effective protection of basic economic rights can promote economic growth."

The Supreme Court of India has used a practical interpretation of India's constitution around the public interest to protect the poorest and most oppressed populations on several occasions. This is a good example of the practical application of constitutional economics methodology.

Importance for transition and developing countries

In the English language, the word “constitution”, along with the meaning “constitution”, often refers to the set of fundamental principles that govern a commercial, religious, or public organization. This broader understanding is characteristic of the Western school of constitutional economy. In contrast to this, the Russian School of Constitutional Economy, which was developed around the turn of the millennium, focuses exclusively on the concept of the national constitution. The Russian model of the constitutional economy tries to bring together the constitutional economic rights of citizens and the economic policy of the state. In 2006, the Russian Academy of Sciences officially recognized constitutional economics as a separate academic sub-discipline.

Appropriate distribution of national wealth is the main theme of the constitutional economy. Many countries with restructuring or developing economic systems treat their constitutions only as abstract legal documents that may have nothing in common with the actual economic policy of the state. Three quarters of all independent states still live under almost absolute state control of the economy. Neither civil society nor individual citizens in these states have any influence on decisions about the distribution of national wealth. This is why constitutional economy is particularly important for countries whose political and economic systems are in transition and in which the state only rarely (if at all) respects the constitutional economic rights of citizens.

credentials

  1. ↑ Ludwig Van den Hauwe, 2005. "Constitutional Economics II," The Elgar Companion to Law and Economics , pp. 223-24.
  2. ↑ Peter Barenboim, Constitutional Economics and the Bank of Russia, Fordham Journal of Corporate and Financial Law , 7 (1), 2001, p. 160.
  3. ↑ Buchanan, J., Logical Formulations of Constitutional Liberty, Vol. 1, Indianapolis, 1999, p. 372.
  4. ↑ Ludwig Van den Hauwe, 2005. "Constitutional Economics II," The Elgar Companion to Law and Economics , pp. 223-24.
  5. ↑ https://rd.springer.com/1572-9966
  6. ^ Posner R., The Constitution as an Economic Document. The George Washington Law Review. November 1987. Vol. 56. No. 1.
  7. ↑ Jeremy Cooper, Poverty and Constitutional Justice , in Philosophy of Law: Classic and Contemporary Readings , edited by Larry May and Jeff Brown, Wiley-Blackwell, UK, 2010
  8. ↑ Peter Barenboim, Natalya Merkulova. " The 25th Anniversary of Constitutional Economics: The Russian Model and Legal Reform in Russia, in The World Rule of Law Movement and Russian Legal Reform (PDF; 617 kB)", edited by Francis Neate and Holly Nielsen, Justitsinform, Moscow (2007)
  9. ↑ Gerald W. Scully, "Constitutional Economics: The Framework for Economic Growth and Social Progress" (PDF; 501 kB)