Economic Politics
The Costs of Democracy

This book raises and addresses questions about the consequences of democratic institutions for economic performance.

William R. Keech (Author)

9780521462068, Cambridge University Press

Hardback, published 24 February 1995

256 pages, 8 b/w illus.
23.7 x 15.7 x 2.2 cm, 0.521 kg

"I encourage faculty teaching macroeconomics at any level to incorporate Economic Politics: The Costs of Democracy into their course. And I encourage everyone with an interest in macroeconomic policy to read this book." Dennis Coates, Public Choice

This book raises and addresses questions about the consequences of democratic institutions for economic performance. Do institutions of accountability inside and outside government through periodic elections produce efficient results, or do they lead to the kind of accumulation of special privileges and protections from market competition that reduces efficiency and growth? Professor Keech suggests that there are modest and bearable costs of democratic procedures, comparable to the agency costs incurred whenever a principal delegates authority to an agent. Democracy, however, does not systematically cause inferior macroeconomic policy detrimental to a population's long-term welfare. Rather, there is a logical circularity among voter preferences, institutions, and economic and political outcomes. This accessible synthesis and sharp perspective will be highly useful for professionals, graduate students, and upper-level undergraduates aiming to understand the relationship between politics and economics.

Part I. Introduction: 1. Macroeconomic politics and the costs of democracy
2. Macroeconomic theories and their political implications
Part II. Models of Routine Politics: 3. Models of accountability and opportunism: the electoral cycle
4. Models of choice: partisanship
Part III. The Sources and Authority of Macroeconomic Goals: 5. The authority of macroeconomic goals
6. Voters, elections, accountability, and choice
Part IV. Institutions and Processes: 7. Discretion and accountability in the fiscal policy process
8. Discretion and accountability in the monetary policy process
Part V. Conclusion: 9. The costs of democracy
References
Index.

Subject Areas: Political economy [KCP]