Why does capitalism triumph in the West but fail almost everywhere else? Elegantly, and with rare clarity, Hernando de Soto revolutionizes our understanding of what capital is and why it has failed to benefit four-fifths of mankind -- and explains the solution. 'A revolutionary book ...may not be in the class of Das Kapital, Adam Smith's Wealth of Nations or Keynes's General Theory. But if the criteria for joining that exclusive club is a capacity not only to change permanently the way we look at the world, but also to change the world itself, then there are good grounds for thinking that this book is surely a contender.' Donald Macintyre, The Independent 'Few people in Britain have heard of Hernando de Soto ...but The Mystery of Capital has already led the cognoscenti to put him in the pantheon of great progressive intellectuals of our age.' Mark Leonard, New Statesman 'A crucial contribution. A new proposal for change that is valid for the whole world' - Javier Perez de Cuellar (Former Secretary United Nations)

http://capeyorkpartnership.org.au/wp-content/uploads/2015/07/The-Mystery-of-Capital_Hernando-de-Soto-book-review-by-Noel-Pearson.pdf

The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else

In a general equilibrium model of a labor economy, the size of government, measured by the share of income redistributed, is determined by majority rule. Voters rationally anticipate the disincentive effects of taxation on the labor-leisure choices of their fellow citizens and take the effect into account when voting. The share of earned income redistributed depends on the voting rule and on the distribution of productivity in the economy. Under majority rule, the equilibrium tax share balances the budget and pays for the voters' choices. The principal reasons for increased size of government implied by the model are extensions of the franchise that change the position of the decisive voter in the income distribution and changes in relative productivity. An increase in mean income relative to the income of the decisive voter increases the size of government.

A Rational Theory of the Size of Government

Over the past few years, there has been a steadily increasing interest on the part of economists in happiness research. We argue that reported subjective well-being is a satisfactory empirical approximation to individual utility and that happiness research is able to contribute important insights for economics. We report how the economic variables income, unemployment and inflation affect happiness as well as how institutional factors, in particular the type of democracy and the extent of government decentralization, systematically influence how satisfied individuals are with their life. We discuss some of the consequences for economic policy and for economic theory.

What Can Economists Learn from Happiness Research

Realist and other scholars commonly hold that rationally led states can and sometimes do fight when no peaceful bargains exist that both would prefer to war. Against this view, I show that under very broad conditions there will exist negotiated settlements that genuinely rational states would mutually prefer to a risky and costly fight. Popular rationalist and realist explanations for war fail either to address or to explain adequately what would prevent leaders from locating a less costly bargain. Essentially just two mechanisms can resolve this puzzle on strictly rationalist terms. The first turns on the fact that states have both private information about capabilities and resolve and the incentive to misrepresent it. The second turns on the fact that in specific strategic contexts states may be unable credibly to commit to uphold a mutually preferable bargain. Historical examples suggest that both mechanisms are empirically plausible.

https://web.stanford.edu/group/fearon-research/cgi-bin/wordpress/wp-content/uploads/2013/10/Rationalist-Explanations-for-War.pdf

Rationalist explanations for war

During recent years social scientists have come to reaffirm that understanding almost any facet of social life requires a simultaneous understanding of how economic institutions work and how they are influenced by values and norms. Sociology, and especially economic sociology, is well equipped to be of assistance in this endeavor. Neil Smelser and Richard Swedberg bring together leading sociologists, economists, and political scientists in The Handbook of Economic Sociology, the first comprehensive view of this vital and growing field. "This excellent volume is a compilation of some of the best writing in this field over the past decade, including basic works like Oliver Williamson's transaction cost theory of the firm, and [is] a helpful comparison of economic sociology to mainstream economics." —Francis Fukuyama, Foreign Affairs "This is the first comprehensive theoretical and empirical account of the burgeoning field of economic sociology. The scholarship is consistently strong. . .. The book will be greeted warmly and read by serious scholars throughout the social sciences." —Robert K. Merton "This is a bold, ambitious, almost daunting project. ... It will surely become the standard reference book for the field—the sort of text every scholar will have to know-, consult, and cite." —Viviana Zelizer

Handbook of Economic Sociology

1. An Introduction to Law and Economics. 2. A Review of Microeconomic Theory. 3. An Introduction to Law and Legal Institutions. 4. An Economic Theory of Property. 5. Topics in the Economics of Property Law. 6. An Economic Theory of Contract. 7. Topics in the Economics of Contract Law. 8. An Economic Theory of Tort Law. 9. Topics in the Economics of Tort Liability. 10. An Economic Theory of the Legal Process. 11. An Economic Theory of Crime and Punishment. 12. Topics in the Economics of Crime and Punishment.

Law and Economics

ECONOMIC THOUGHT ABOUT LAW iS old, but the economic analysis of law, which relies on formal models, is new.1 A little over 30 years ago, economics was relegated by lawyers to the technical role of providing expert advice on a relatively narrow set of laws in such fields as antitrust and labor. There were no journals devoted to the economic analysis of law, it had no place in the first-year curriculum at American law schools, and few American law schools allocated a fulltime faculty position to a pure economist.2 From its modest beginnings in the 1960s, the economic analysis of law became an intellectual fad in the 1970s. The fad is over, but the continuing progress of the subject remains impressive. There are now four journals devoted to the economic analysis of law,3 articles using this

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Economic Analysis of Legal Disputes and Their Resolution

DETAILED CONTENTS ix LIST OF ILLUSTRATIONS xv LIST OF TABLES xvii PREFACE AND ACKNOWLEDGMENTS xix CHAPTER 1. Taking Consequences Seriously: Introduction 1 PART I: PROCESSES OF GOVERNMENT: VOTING, BARGAINING, ADMINISTERING 15 CHAPTER 2. Voting 17 CHAPTER 3. Bargaimng 51 CHAPTER 4. Administering 79 PART II: THE OPTIMAL NUMBER OF GOVERNMENTS 101 CHAPTER 5. Intergovernmental Relations CHAPTER 6. Government Competition 127 CHAPTER 7. Ministries and Agencies PART III: OPTIMAL DIVISION OF POWERS CHAPTER 8. Specialization 173 CHAPTER 9. Separation of Powers 211 PART IV: OPTIMAL RIGHTS 241 CHAPTER 10. The Value of Rights 243 CHAPTER 11. Philosophies of Rights: Liberty and Redistribution 261 CHAPTER 12. Property Rights 279 CHAPTER 13. Free Speech 309 CHAPTER 14. Civil Rights 333 CHAPTER 15. Summary and Conclusion 359 BIBLIOGRAPHY 381 GENERAL INDEX 399 INDEX OF NAMES 409

The Strategic Constitution

This article develops an economic theory of expressive law. By expressing social values, law can tip a system of social norms into a new equilibrium. This process can create or destroy a social norm without changing individual values. In addition, law can change the individual values of rational people. Internalizing a social norm is a moral commitment that attaches a psychological penalty to a forbidden act. A rational person internalizes a norm when commitment conveys an advantage relative to the original preferences and the changed preferences. I call such a commitment a “Pareto self‐improvement.” By creating opportunities for Pareto selfimprovements, law induces rational people to change their preferences. Inducing change in this way respects individual preferences, rather favoring a particular moral theory.

/pdf/expressive-law-and-economics-4ksy74et76.pdf

Expressive Law and Economics

This article develops an economic theory of expressive law. By expressing social values, law can tip a system of social norms into a new equilibrium. This process can create or destroy a social norm without changing individual values. In addition, law can change the individual values of rational people. Internalizing a social norm is a moral commitment that attaches a psychological penalty to a forbidden act. A rational person internalizes a norm when commitment conveys an advantage relative to the original preferences and the changed preferences. I call such a commitment a Pareto self-improvement. By creating opportunities for Pareto self-improvements, law induces rational people to change their preferences. Inducing change in this way respects individual preferences, rather favoring a particular moral theory.

/pdf/expressive-law-and-economics-5anaddfs3b.pdf

Robert D. Cooter

Papers

Law and Economics

Economic Analysis of Legal Disputes and Their Resolution

The Strategic Constitution

Expressive Law and Economics

Expressive Law and Economics