After 20 years since the U. S. Supreme Court ruling in Kelo v City of New London , the academic literature has mostly dried up. Yet cases of economic development takings continue to emerge across the country. This paper revisits some of the main issues from a law and economics perspective. What are the long-term effects of the Kelo ruling and the state reforms it spawned? How effective have regulations been in accomplishing their goals of reducing inefficient economic development takings? We review the quantitative literature that compared the 50 states’ legislative and judicial responses to Kelo , and then present a comparative case study of two states: Michigan, which enacted significant reforms, and North Carolina, which enacted relatively mild reforms. Over time, developers and local or state authorities explore increasingly creative ways to extract rents through loophole mining, boosted by a diminished spotlight. Thus, relatively strong takings powers that may appear efficient in the short run may, in the long run, lead to greater inefficiencies than intended, implying that stricter regulations may become more necessary in the long-run to maintain efficiency.

This paper is a draft manuscript of Chapter 3 of a book project aiming to examine the Modern Budget Era Problem from a detailed political-economic history that spans 1790-2021. This partial draft book manuscript will remain archived at this location, in the form uploaded while the manuscript is in progress.

A review essay of Nobel Laureate Mario Vargas Llosa's intellectual autobiography, The Call of the Tribe.

Are think tanks primarily middlemen of ideas that translate academic work for activists and policy makers? Is a crisis, real or imagined, necessary for reform? I treat reform as an economic production process and contrast the allocation and exchange paradigms for modeling how think tanks and academia coordinate efforts to produce institutional change. A traditional model of the intellectual structure of production maintains a linear supply-chain approach, with academics as idea originators. This traditional model implicitly treats intellectual production as a problem of resource allocation. Yet, when viewed instead through the exchange paradigm, the intellectual structure of production resembles a dynamic network of symbiotic relationships. As technologies of idea dissemination advance, coordination between think tanks and academics increasingly resembles a multidimensional, multidirectional network of nonmarket-exchange opportunities. In the resource-allocation paradigm, donors seek a return on investments within particular stages of intellectual production, but when the structure of intellectual production is viewed through the exchange paradigm, the better question may be how to support exchange opportunities between academics and think tanks.

While Buchanan is best known for the economics of politics and constitutions, his seminal contributions to this field are but one branch of his more underlying methodology and approach to doing social science. Buchanan’s fundamental project was to re-orient economics and social science toward an analysis of symbiotic exchange (catallactics) rather than of antiseptic allocation (optimization). The most definite statement of this contribution lies in Buchanan’s 1963 presidential address to the Southern Economic Association, “What should economists do?” which was later expanded into a book of the same title. This paper seeks to draw attention to several of Buchanan’s more recent but lesser known articles where he fully develops this theme. He calls on economists to rediscover Adam Smith’s “elementary notion” about the division of labor and the extent of the market, and he professes the notion of “generalized increasing returns” as a mechanism for economists to rediscover their Scottish Enlightenment roots within the neoclassical framework. In this same vein, we also discuss how Buchanan’s rediscovery might apply to two prominent and ongoing twenty-first century issues, trade restrictions and populism.

Who can’t feel good about the mind-blowingly short duration it’s taken to develop a safe and effective vaccine? For the same reason, we should also be amazed at the complexity of its distribution. The Wall Street Journal captures the point. The effort to vaccinate the nation relies on chemists, factory workers, truck drivers, pilots, data scientists, bureaucrats, pharmacists and health-care workers. It requires ultracold freezers, dry ice, needles, masks and swabs converging simultaneously at thousands of locations across the country. To work, ever one of the many and complicated links of the chain has to hold. The distribution has been widely described as the biggest mobilization since World War II. Bravo!, I say. We need some awe-inspiring words to befit this marvelous spectacle. And yet, the vaccine itself is a relatively simple compound. It consists of Pfizer’s modified mRNA plus seven inactive ingredients as common as table sugar. The mRNA itself stands as an unprecedented achievement. Yet the compound is ordinary, even elegantly so. And it will save millions. What beauty in the simple! For many, this facet of the story evokes the classic essay bestowing the curious title, “I, Pencil: My Family Tree as Told to Leonard Reed”. Originally published in 1958, this essay skillfully describes the materials that comprise an ordinary pencil, and the far reaches of the world from whence those materials source. It also artfully describes the innumerable myriad of people around the world whose daily work contributes crucially to putting ordinary items such as pencils on nearby stores shelves.

What explains the recent resurgence of appeal and popularity of socialism in the United States? Why especially do people today like socialism when history and economics are clear that socialism as actually practiced has had disastrous consequences? These questions are taken up in the book Socialism Sucks: Two Economists Drink Their Way Through the Unfree World by Benjamin Powell and Robert Lawson. After an entertaining and insightful read through the authors’ journeys, Lawson and Powell conclude that people today don’t favor actual socialism, not socialism as properly understood by economists. Socialism properly understood is the abolition of private property and the central planning of all economic activity. F. A. Hayek in his 1949 paper, “The Intellectuals and Socialism,” raises the same question, and concludes that a biased intellectual class manipulates public opinion to support socialism. I then put Lawson, Powell, and Hayek in the context of James Buchanan’s 2005 paper, “Dependency as Desideratum,” which defines and categorizes four distinct but interrelated definitions of socialism. The most fundamental of these is a form of bottom-up socialism, which does not concern itself with collectivizing property rights, but which nonetheless feeds Leviathan.

Using philosopher John Searle's framework as developed by Guala and Hindriks and by Caton and López, we propose a cognitive framework for economic and social theory. Searle's status function provides a grounding for a description of agent preferences. Agent preferences reflect valuations implied in the status function and are revealed as agents interact with the environment according to rules of behavior they have adopted. We consider how changes in belief, reflected in changes to status functions and rules, transform incentives and how incentives reinforce particular beliefs. We then apply the framework to an interpretation of history and to the construction and interpretation of an agent-based model comprised of agents who employ a dynamic structure of rules to guide interpretation and behavior.

Having pioneered the concept in economics that institutions structure incentives, Douglass North’s later work posed the question, in turn: what structures institutions? His approach explored the role of culture, norms, and ideas and eventually drew its focus on shared mental models as the basis of institutions. An ongoing literature takes up North’s fundamental question. In this paper, we contribute to this literature by bringing together North’s mental-models approach and the work of philosopher John Searle. Searle pioneered the concept in philosophy that institutions are constitutive rules, established through collective assignment of particular status to objects in the world. Drawing upon cognitive science research on knowledge, learning, and habituation, as well as computer science research on artificial intelligence, we develop Searle’s framework to pose a simple yet general account of the cognitive origins of institutions and the implications of this link for social theory. Our framework reconciles the social science approach to institutions as regulative rules with the philosophy approach to institutions as constitutive rules. It also provides a basis for considering impediments to social interaction that arise when individuals possess conflicting normative ideas and affiliate into groups whose shared understandings appear to conflict.

Previous tests of the endowment effect have usually observed WTA-WTP disparities. Here, a public good experiment is employed. Both account framing and duration framing treatments are introduced to alter subjects’ perceived control over an initial endowment. Results do not indicate that preferences shift in a way consistent with the endowment effect.

Two shifts of informal rules occurred in the decades around the turn of the 20th century that continue to shape U.S. fiscal policy outcomes. Spending norms in the electorate shifted to expand the scope of the government budget to promote economic security and macroeconomic stability. Simultaneously, norms for elected office shifted to careerism. Both norms were later codified into formal rules as legislation creating entitlement programs, macroeconomic responsibility, and organizational changes to the fiscal policy process. This institutional evolution increased demand for federal expenditures while creating budgetary commons, thus imparting strong motivations to spend through deficit finance in normal times. Despite the last four decades of legislative attempts to constrain spending relative to taxes, the informal norms have trumped the formal constraints. While the empirical literature on deficits has examined the constraining effects of informal rules, this paper offers a novel treatment of shifting norms as having expansionary effects on deficits.

This introduction presents a brief background of the Public Choice Society, its 50th anniversary conference, and the purpose of this symposium. This symposium consists of 13 papers within four of the main pillars of public choice: Virginia political economy, Bloomington political economy, experimental economics, and social choice. These papers pay homage to the Society's first 50 years while demonstrating the breadth and vibrancy of modern public choice scholarship.

Recent theoretical work has investigated the exact mechanism(s) by which the holdout problem creates inefficiency and thereby justifies eminent domain. In parallel, recent empirical work has demonstrated that state courts and legislatures either grant discretion to, or prohibit, local authorities from using eminent domain for economic development. This article extends Miceli’s (2011) strategic holdout model to incorporate political inefficiencies that may emerge when granting discretionary powers. Using eminent domain for nonefficiency-enhancing purposes substitutes for voluntary exchange, which is optimal, and attracts rent seeking by developers. Therefore, the efficiency justification for eminent domain is conditional. It depends on the relative magnitudes of the market and political sources of inefficiency. This analysis informs the efficiency consequences of court rulings, most notably Kelo v. City of New London, and the various changes in states’ laws that followed.

Divided government is known to correlate with limited government, but less is understood about the empirical conditions that lead to divided government. This paper estimates the determinants of continuous and categorical measures of divided government in an empirical macro political economy model using 30 years of data from the American states. Voters support more divided government after increased government spending per dollar of tax revenues, but more unified government after worsening incomes and unemployment rates. Only conditional support is found for the strategic-moderating theory (Alesina and Rosenthal in Econometrica 64(6):1311–1341, 1996) that focuses purely on midterm cycles and split-ticket voting absent economic conditions.

Lawrence Lessig's book Republic, Lost argues that a new type of corruption has overcome the modern Congress. Unlike the venal corruption of earlier periods, for example the gilded age, the 21st Century Congress has become corrupt in entirely legal ways. The pressures of campaign finance, and of making connections in the influence economy, distract and distort elected officials from serving the public interest. Voters perceive the electoral system to be corrupt, losing trust in government. Lessig proposes reforms remove elected officials from having a role in campaign finance. Through mechanisms such as the "democracy voucher", Lessig proposes to spend more in aggregate on elections, but have the composition be much less concentrated. This review critically reviews Lessig's argument by comparison to the received empirical literature in the social sciences. While drawing attention to important yet underappreciated aspects of these problems, Lessig book warrants a strong audience. However, the corruption narrative is not supported by the literature, and the reform proposals like previous reforms can be strategically circumnavigated.

In the spirit of the Upton Forum, I will take this opportunity to compare and contrast takings in developing versus developed countries (specifically the United States). I will argue that takings differ in the two realms by the political processes through which they pass, which reflects the different institutional and ideological contexts through which they are enacted. These political differences help explain the fact that the distributional effects operate in opposing directions in the two settings: from rich to poor in developing countries but from poor to rich in the United States. Yet there is an important similarity as well. Takings in both developed and developing countries alter people’s incentives for maintaining and investing in their property. This paper explores these margins of contrast between takings in the developed versus developing world, and then discusses implications for the primary economic justification of the takings power, known as the holdout problem. The holdout problem is an argument based on economic efficiency, but it does not account for two sources of inefficiency that I highlight here.