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This article tests for the presence of a regularity in the relationship between income inequality and voter turnout in two countries with common Westminster parliamentary systems. We begin by using data from a panel of Canadian provinces to assess two contrasting monotonic hypotheses: conflict theory that predicts a positive monotonic relationship (inequality promoting conflict and greater electoral participation) against relative power theory that predicts a negative monotonic relationship (inequality leading to political alienation and electoral disengagement). Nesting these hypotheses within a rational choice model of voter turnout, we find that neither hypothesis explains the data convincingly while a search across fractional polynomials finds that the relationship is better described as non-monotonic with an inverted U shape. The generality of this finding is assessed by rerunning the analysis on a panel of 14 Indian states. The commonality of results across countries with similar political structures but widely different demographics and stages of development is striking and consistent with the hypothesis that conflict theory operates at low levels of income inequality before growing inequality leads to voter alienation and lower voter turnout. In the Canadian case the tipping point arises at an income Gini of 0.32 while the Indian case peaks at consumption Gini of 0.34. [ABSTRACT FROM AUTHOR]

A common argument in the trust literature is that high-trust cultures allow efficient commercial contracts to be shorter, covering fewer contingencies. We take this idea to the topic of social contracts. Specifically, we ask whether social trust affects the length and detail of constitutions. Cross-country estimates suggest that national trust levels are indeed robustly and negatively associated with the length of countries' constitutions. [ABSTRACT FROM AUTHOR]

When there are three parties, instability problems brought about by the emptiness of the core of the corresponding cooperative game may cause the Coase Theorem to fail, even when other more direct impediments to bargaining are low. We show that the standard Coasean bargaining game involving three parties is strategically equivalent to an asymmetric three-player majority game. Hence, when there are three parties, instability problems will cause the Coase Theorem to fail if and only if the core of the corresponding three-player majority game is empty. We use this equivalence result to derive all instances in which the Coase Theorem will and will not hold with three parties, and show that a priori, such instability problems are likely to be rare-the Coase Theorem will actually hold most (over 80 %) of the time. We also demonstrate that it is always possible to find a set of transaction costs which, when introduced into a frictionless bargaining situation, will cause an empty core to become non-empty. In other words, transaction costs can mitigate instability problems: situations exist in which the presence of transaction costs will cause the Coase Theorem to hold when, in the absence of those direct transaction costs, it would fail to hold. When there are three parties, rather than hindering agreements, the existence of direct transaction costs can sometimes-but not always-reduce instability and encourage Coasean bargaining. [ABSTRACT FROM AUTHOR]

This paper raises an old question and proposes a new answer. The question is, 'Must public goods be produced by governments?' The consensus answer is 'Yes,' on the grounds that transaction costs related to group size prevent all potential consumers of a public good from entering into voluntary arrangements to produce efficient levels of that good. Government intervention thus is required to achieve efficiency. Yet many obvious examples of public goods are not financed or even subsidized by government. Conspicuous examples of this phenomenon include the development of important innovations in technique in fields such as music (Bach and Beethoven), literature (Defoe, Dickens and Shakespeare, not excepting Homer or Adam Smith), and the visual arts (Cezanne), not to mention many crucial scientific discoveries. Indeed, the obvious public-good aspects of scientific knowledge induced many private societies to offer prizes for particular innovations. Two questions are raised by the private, voluntary provision of nonrival outputs or inputs: (1) what conditions contribute to this phenomenon, and (2) can voluntary provision come 'close' to efficient provision? We suggest in this paper that, under certain conditions, the gains from many public goods whose benefits reach nationwide populations are largely realized at group sizes far smaller than even county or municipal jurisdictions. [ABSTRACT FROM AUTHOR]

Brilliant but little known, in part because his style was dense and crucial papers unpublished, Earl Thompson reformulated standard theory to achieve policy relevance, focusing on significant rent-seeking inefficiencies stemming from private information and transaction costs. Drawing on history, he showed a vast array of institutions to be efficient which economists had previously found to be inefficient, modeled governments and their nature, defined government's functions, and showed why dominant states rise and fall. [ABSTRACT FROM AUTHOR]

This paper focuses on the extension of transaction costs to appropriative activity and coercive power in the property rights approach. It has been argued that including the costs of appropriation and violent enforcement in transaction costs is based on the assumption that Coaseian bargaining can be extended to any institutional scenario, i.e., voluntary as well as coercive exchange. However, voluntary transactions cannot capture the logic of coercive power. This means that the assumption of an efficient political market is not valid, and that the 'political Coase theorem' lacks the logical consistency to provide a cornerstone for political theory. [ABSTRACT FROM AUTHOR]

The aim of this paper is to determine to what extent and how federal taxes affect local tax decisions. Testing the impact of an increase in the federal tax on horizontal tax competition with Canada-US data for 1984-1994, it finds evidence that an increase in federal tax makes horizontal tax reactions weaker. This is because an increase in federal tax raises the cost, in terms of utility of income, of a unit increase in the province’s tax rate. On the methodological side, it is possible to estimate the impact of the federal tax on the fiscal policy of the province without neglecting control for year effects, which cannot be used in the empirical literature because they are perfectly collinear with the federal tax. [ABSTRACT FROM AUTHOR]

Economic development on Canadian Indian reserves is hindered by the fact that aboriginal peoples living on these reserves lack efficient and effective property rights. In 1999, the federal government passed the First Nations Land Management Act, which allows participating First Nations to develop their own land codes for administering their reserve lands. After analyzing two First Nation land codes in Ontario and Saskatchewan, this paper finds that land codes are effective mechanisms for addressing drag on on-reserve development. [ABSTRACT FROM AUTHOR]

We analyze the effect of different legislature size on per capita regional expenditure in Italy. According to the theory, legislature size has an indefinite effect on government spending because logrolling and transaction costs may have canceling effects. We find a large and significantly positive effect of the number of legislators. We use these findings to forecast the effects of the increase in the number of legislators that is taking place in some regions: a 10% increase in legislature size commands on average a 12% increase in per capita regional expenditure. [ABSTRACT FROM AUTHOR]

Business groups play an important role in emerging economies. The transactions cost perspective, which has dominated our understanding of such groups, argues that the emergence of business groups is a natural response to market failures in developing countries. In this paper, we propose an alternate theoretical perspective – the rent-seeking view – that takes these groups as engaging in coordinated lobbying for the capture of rents created by governments. We develop and implement an empirical strategy to test for the rent-seeking view drawing from the property rights theory of corporate finance. We find strong empirical support for the rent-seeking view using a large cross-sectional data-set of firms in India. [ABSTRACT FROM AUTHOR]

Analyzes the role of political parties in reducing transaction costs of electoral participation. Information on political representative; Applications of transaction cost economics and political parties; Impact of transaction costs to public policy.

Analyzes the efficiency of law within a public choice perspective. Potential improvements in institutional design that may constrain opportunism in the form of transaction-cost augmentation by government officials; Significance of transaction-cost economics to rent-seeking behavior in politics; Incentive and constraints facing transaction costs in the government.

Discusses the importance of transactions costs in a team production or logrolling setting in determining legislative outcomes. Results of a correct measurement of the legislative time reference for bills; Possible solutions to the heterogeneity of bills problem; Ordinary least squares regression results on the speed of passage of appropriations bill.

Presents information on transactions cost and the consumption of some goods and services (CGS) that are controversial in nature. Kinds of transaction cost; Details of the accounting for transaction costs; Market demand for CGS.

Discusses a public choice theory of monopoly regulation. Integral component of mainstream market economics; Definition of institutional arrangements in the transactions cost approach to the analysis of institutional adjustment; Assumptions in which the analysis of institutional adjustment depends.

Analyzes the role of transaction costs in the growth or decline of government. Actions of government officeholders that alter people's perceptions of the costs and benefits of government; Determinants of government manipulation of constitutional-level transaction costs; Transaction-cost manipulation in the private sector.

Looks at the role of the theory of games in the nature of bargaining process. Relationship between institutions ad transaction costs; Factors that affect private bargains; Key elements of transaction costs.