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Political Economy and Public Finance

The Role of Political Economy in the Theory and Practice of Public Economics Edited by Stanley L. Winer, Canada Research Chair Professor in Public Policy, School of Public Policy and Administration and Department of Economics, Carleton University, Ottawa, Canada and Hirofumi Shibata, former President, Kanto Gakuen University, Japan
There is a long-standing difference amongst public economists between those who think that collective choice must be formally acknowledged, and those who derive their policy recommendations from a social planning framework in which politics plays no role. The purpose of this book is to contribute to a meaningful dialogue between these two groups, in the belief that the future of both political economy and of normative public finance lies somewhere between the two approaches.

Some of the specific questions addressed in the book include: does public finance need political economy? Should collective choice play a role in the standard of reference used in normative public finance? What is a ‘failure’ in a non-market or policy process? And what have we learned about the theory and practice of public finance from three decades of empirical research on public choice? The book also provides a practitioner’s view of the political economy of redistribution.
In Association with the International Institute of Public Finance
Extent: 256 pp
Hardback Price: $128.00 Web: $115.20
Publication Date: 2003
ISBN: 978 1 84376 073 3
Availability: In Stock
Paperback Price: $56.00 Web: $44.80
Publication Date: 2003
ISBN: 978 1 84376 118 1
Availability: In Stock
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  • Economics and Finance
  • Political Economy
  • Public Choice Theory
  • Public Finance
  • Politics and Public Policy
  • Political Economy
  • Public Choice
There is a long-standing difference amongst public economists between those who think that collective choice must be formally acknowledged, and those who derive their policy recommendations from a social planning framework in which politics plays no role. The purpose of this book is to contribute to a meaningful dialogue between these two groups, in the belief that the future of both political economy and of normative public finance lies somewhere between the two approaches.

Some of the specific questions addressed in the book include: does public finance need political economy? Should collective choice play a role in the standard of reference used in normative public finance? What is a ‘failure’ in a non-market or policy process? And what have we learned about the theory and practice of public finance from three decades of empirical research on public choice? The book also provides a practitioner’s view of the political economy of redistribution.

The distinguished list of authors, many of whom are pre-eminent in their fields, includes Robin Boadway, Geoffrey Brennan, Albert Breton, Aníbal Cavaco Silva, Walter Hettich, Gebhard Kirchgässner, Dennis Mueller, William Niskanen, Hirofumi Shibata, Eugene Smolensky, Heinrich Ursprung, Frans van Winden, Stanley Winer and Donald Wittman.

The importance of political economy to any understanding of why public policy evolves as it does is now widely accepted by public finance scholars and practitioners. This book goes a step further by considering the role of collective choice in defining what constitutes ‘good’ or ‘better’ policy. It will be an essential companion for all scholars of public finance and political economy.
‘The overall quality of the volume is excellent, so reading the entire volume would be worthwhile, and readers interested in the specific topics covered by any of the chapters would find those chapters helpful. The individual chapters can stand alone, but taken together the volume illustrates how public choice analysis can influence the subject matter of traditional public finance.’
– Randall G. Holcombe, Public Choice
Contributors: R. Boadway, G. Brennan, A. Breton, A. Cavaco Silva, W. Hettich, G. Kirchgässner, D.C. Mueller, W.A. Niskanen, H. Shibata, E. Smolensky, H.W. Ursprung, F. van Winden, S.L. Winer, D. Wittman
Contents:

Preface
1. Political Economy and Public Finance: A Brief Introduction
Stanley L. Winer and Hirofumi Shibata

PART I: DOES PUBLIC FINANCE NEED POLITICAL ECONOMY?
2. Public Finance, Public Choice and the Political Economy of Regulation
Geoffrey Brennan

3. Public and Welfare Economics under Monopolistic and Competitive Governments
Albert Breton

PART II: SHOULD COLLECTIVE CHOICE PLAY A ROLE IN THE STANDARD OF REFERENCE USED IN NORMATIVE PUBLIC FINANCE?
4. The Role of Public Choice Considerations in Normative Public Economics
Robin Boadway

5. Better than What? Policy Analysis, Collective Choice and the Standard of Reference
Walter Hettich
Comments and a Rejoinder

PART III: WHAT IS A ‘FAILURE’ IN A NON-MARKET OR POLICY PROCESS?
6. Normative Public Finance Without Guilt: Why Normative Public Finance is Positive Public Finance
Donald Wittman

7. On the Origin and Identification of Government Failures
William A. Niskanen
Comments

PART IV: WHAT HAVE WE LEARNED ABOUT THE THEORY AND PRACTICE OF PUBLIC FINANCE FROM THREE DECADES OF EMPIRICAL RESEARCH ON PUBLIC CHOICE?
8. Interest Groups, Redistribution and the Size of Government
Dennis C. Mueller

9. The Effects of Fiscal Institutions on Public Finance: A Survey of the Empirical Evidence
Gebhard Kirchgässner

10. Experimental Investigation of Collective Action
Frans van Winden

PART V: A PRACTITIONER’S VIEW OF THE POLITICAL ECONOMY OF REDISTRIBUTION
11. Equity Policy and Political Feasibility in the European Union
Aníbal Cavaco Silva

PART VI: WHERE DO WE GO FROM HERE?
12. Directions for Future Research
Eugene Smolensky

13. Where Do We Go from Here?
Heinrich W. Ursprung
Comments

Index