The New Institutionalism
Political Science 317
Fall 2002
Professors Jerry Hough
and
Michael Munger
hough@duke.edu munger@duke.edu
|
M-W
Office
Hours: Wednesday 1-3, and by appt. |
Perkins Library, Rm.
303a munger@duke.edu office phone:
660-4301 home phone: 844-0154 |
INTRODUCTION:
This course is a survey of recent developments in transactions cost and
collective action theory, especially as these techniques have been applied to
the study of classic questions in political science. This is not an
economics course, though many of the readings in the first portion of the
course derive from the economics literature.
GRADES: Grades derive from the
following...
1. A paper on
a topic to be decided in consultation with the instructors. Possibilities
include an analysis of the strengths and weaknesses of a body of research,
identification of a research program that would advance the state of literature
in some area, or a report on some related supplementary reading that goes
beyond class materials. The due date for the paper is not later than the end
of exams. No incompletes will be awarded, except in documented medical
emergencies. A rough draft is due right after fall
break (no rough draft, no paper; no paper, no grade!), so you should begin
consulting with us soon about topics.Paper: 40% of Grade
2. A final designed
to help you prepare for prelims. This will be a take-home, open
book exam during the exam period. We will pass out a list of ten possible
questions right after fall break. The exam will take place in the assigned
exam room, and you will be asked to write answers in a blue book to the three
questions that will be selected randomly.Final: 40% of Grade
3. Participation in
class discussions of assigned readings. You are expected to come to class
prepared to discuss the readings in depth, and to answer questions posed by the
instructors.Participation: 20% of Grade
THEMES:
I.
Institutions as exogenously defined
You may find it useful to think of institutions in the context of what is known
as Plott's fundamental equation:
(Preferences)x (Institutions) = (Outcomes)
In the simplest
conception, the causal arrows are going one way. We will consider at
least the possibility of a feedback loop from outcomes to both preferences and
institutions.
II.
Definitions: Just what are "institutions"?
Douglass North, in his seminal work Institutions, Institutional Change, and
Economic Performance, defined institutions as "the humanly devised
constraints that shape human interaction."We will want to think about what
this leaves out, and what it includes.In particular, North distinguishes
between “institutions” and “organizations.”The latter he defines as the
endogenous, optimizing responses of humans to their institutional environment.
III.
Institutions as endogenous: What are the goals of institutional choice?
The study of is an invitation to raise questions about the design of
institutions. For example, as The Federalist No. 1 points out, the
American constitution is one of the first systems of government to result from
"reflection and choice" rather than "accident and
force." Normally, the design of institutions is justified in
terms of broad public purposes, such as preserving liberty and avoiding
"the mischiefs of faction." But other purposes may
be disguised by the language of the general welfare. For example,
institutions may be designed to enhance the power of a particular group of
people. In fact, this was the contention of Charles Beard about the
framers, as expressed in his Economic Interpretation of the Constitution of
the United States.
IV.
Paradigms.
The field of institutions is in an unusual period of change and growth, and
heightened consciousness of theory. One set of perspectives is sometimes
called the new institutionalism. To some people, such as Kenneth
Shepsle, this means an effort to apply economic reasoning and rational choice
models to the analysis of institutions. To others, such as James
March, the new institutionalism is a much more diffuse, but also highly theoretical
and abstract subject. Another set of perspectives on institutions
is called American political development. This involves sensitivity
to historical change, and to detailed description. Your instructors
are not agnostic, but an attempt will be made to consider a variety of
alternatives and present them fairly. You are encouraged to raise
fundamental questions.
V.
Expectations about readings for this course.
You are expected to read all of the books and articles listed on
this syllabus, and do it before the class for which they are assigned.
Most of the reading assignments for this course are in books you are expected
to purchase, on reserve, or are available electronically by clicking on the
appropriate part of the syllabus.
TEXTS:
The following books are on sale at the Book Store:
1.Buchanan, James, and
Gordon Tullock. 1962. The Calculus of Consent: Logical
Foundations of Constitutional Democracy.
2.Ensminger, Jean.
1992. Making a Market: The Institutional Transformation of an African
Society.
3.Hough, Jerry. 2002
(In progress; NOT FOR QUOTATION). An Analysis of the American Presidential
Election System.
4.Knight, Jack.
1992. Institutions and Social Conflict.
5.Miller, Gary.
1992. Managerial Dilemmas: The Political Economy of Hierarchy.
6.North, Douglass.
1990. Institutions, Institutional Change, and Economic Performance.
READING SCHEDULE:
1.D. North, Insitutions,
Institutional Change, and Economic Performance
2.A.A. Alchian,
“Uncertainty, Evolution, and Economic Theory,” Journal of Political Economy
(1950). (Link)
3.A. Denzau and D. North,
"Shared Mental Models: Ideologies and Institutions," Kyklos 47(1)
(1994), 3-31 (Link)
4.C. Sartorius, “The
Relevance of the Group for the Evolution of Social Norms and Values,” Constitutional
Political Economy, 13 (2002):149-172. (Link)
5.G. Hodgson, “The Evolution
of Institutions:An Agenda for Future Theoretical Research,” Constitutional
Political Economy, 13 (2002):111-128 (Link)
1.J. Ensminger, Making a
Market: The Institutional Transformation of an African Society.
2.F. Hayek, “The Use of
Knowledge in Society,” American Economic Review, 1945. (Link)
3.R. Heiner, “The Origin of
Predictable Behavior,” American Economic Review, 1983. (Link)
Week
3 (9/9 & 9/11) Institutions and Organizing Society
1.J. Knight, Institutions
and Social Conflict (1992)
2.J. Landa, “The Political
Economy of Swarming in Honeybees,” Public Choice, 1986. (e-reserves)
3.G. Mackie, “Ending
Footbinding and Infibulation: A Convention Account, American
Sociological Review, December 1996, 61:999-1017) (Link).
4.J. Vromen, “Stone Age
Minds and Group Selection:What Difference Do They Make?”Constitutional
Political Economy, 13 (2002):173-198. (Link)
Week
4 (9/16 & 9/18): Spontaneous Order:
Reading:
1.R.H. Coase, “The Nature of
the Firm,” Economica (1937). (Link)
2.R.A. Radford, “The
Economic Organization of a P.O.W. Camp”, Economica (1945). (Link)
3.A.A. Alchian and H.
Demsetz, “Production, Information Costs, and Economic Organization,” American
Economic Review (1972). (Link)
4. J. Ensminger, Making a
Market: The Institutional Transformation of an African Society.
Weeks
5 & 6 (9/23, 9/25, 9/28, and 10/2): Transactions Cost Economics
Reading:
1.R.H. Coase, “The Problem
of Social Cost,” Journal of Law and Economics (1960). (e-reserves)
2.O. Williamson,
“Transactions Cost Economics: The Governance of Contractual Relations,” Journal
of Law and Economics (1979). (e-reserves)
3.B. Klein, Crawford and
Alchian, “Vertical Integration, Appropriable Rents, and the competitive
Contracting Process”, Journal of Law and Economics (1978). (e-reserves)
4.B. Klein K. Leffler, "The Role of
Market Forces in Assuring Contractual Performance," Journal of
Political Economy, August 1981. (Link)
5.G. Akerlof, “The Market
for Lemons: Quality Uncertainty and the Market Mechanism,” Quarterly
Journal of Economics (1970). (Link)
Institutions that are not spontaneous:
1.J. Buchanan and G.
Tullock, The Calculus of Consent (1962)
2.D. North and B. Weingast,
"Constitutions and Commitment: The Evolution of Institutions Governing
Public Choice in 17th Century
3.B. Weingast, “Political
Foundations of Democracy and the Rule of Law.” American Political Science
Review. (1997). (Link)
4.M. Olson, “Dictatorship,
Democracy, and Development,” American Political Science Review, Vol. 87,
No. 3. (Sep., 1993), pp. 567-576. (Link)
5.M. McGuire, M. Olson. “The
Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of
Force,” Journal of Economic Literature, Vol. 34, No. 1. (Mar.,
1996), pp. 72-96. (Link)
Reading:
J.
Hough, An Analysis of the American Presidential Election System.
(Chapters 1-4 for Tuesday, Chapters 5-8 for Thursday)
Weeks
10 & 11 (10/28 & 10/30, 11/4 & 11/6): Hierarchy and Organization
1.G. Miller, Managerial
Dilemmas: The Political Economy of Hierarchy (1992).
2.J. March and J. Olsen.
“The New Institutionalism: Organizational Factors in Political Life.” American
Political Science Review (1984). (Link)
3.McCubbins and Schwartz,
“Congressional Oversight Overlooked: Police Patrols vs. Fire Alarms", AJPS
(1984) (Link)
4.K. Shepsle and B.
Weingast, “Structure-Induced Equilibrium and Legislative Choice,” Public
Choice (1981). (e-reserves)
1.J. Aldrich, Why
Parties? The Origin and Transformation of Party Politics in
2.B. Weingast and W.
Marshall, “The Industrial Organization of Congress,” Journal of Political
Economy (1988) (Link)
3.D.M. Kreps, “Corporate
Culture and Economic Theory,” in Alt and Shepsle (eds) Perspectives on
Positive Political Economy (1990). (e-reserves)
4.M. Hinich and M. Munger, Ideology
and the Theory of Political Choice (1994), Chapter 4. (e-reserves)