Working Papers — and Resting Papers (Papers I wish I’d Published)

(1) Working Papers

  • In the Shadow of Violence: A New Perspective on Development.” Working Paper, Hoover Institution, Stanford University, July 2015. DOWNLOAD HERE.

This paper extends the North, Wallis, and Weingast (2009) framework for understanding the problems of development. Our approach distinguishes two development problems that are normally conflated. Most approaches to development focus on the second problem, namely, the transition of societies from limited access orders (LAOs), which limit access to organizations, to open access orders (OAOs), which allows any body to form an organization. In contrast, the first challenge involves the development of LAO societies toward forms of organization that enable more economic output, reduced violence, stable political outcomes, and greater individual well being within the LAO framework. Most World Bank borrowers face the first challenge.

The control of violence is central to the logic of all LAOs and is therefore at the heart of the problem of development. Because the traditional economic framework fails to understand that LAO’s are organized to prevent violence, its policy recommendations usually fail to produce development and sometimes exacerbate the problem. Indeed, the Washington consensus of the 2000s is dominated by efforts to embed institutions of open access orders – property rights, entry into markets, elections, and institutions of good governance – directly into limited access orders. These efforts focus on the second development problem, not the first; they are therefore miss-targeted. Instead, our approach provides specific implications of the approach for development policy in four areas: rents and market constraints, organizations, democracy and elections, and organizations with violence capacity.

  • “The Sparta Game: Violence, proportionality, austerity, collapse” (with Josiah Ober). In Danielle Allen, Paul Christesen, and Paul Millett eds. How to Do Things with History. Oxford University Press (forthcoming). DOWNLOAD HERE.

This paper suggests that contemporary versions of Adam Smith’s informal equilibrium theory in Book III of the Wealth of Nations (Smith, 1776) can explain Sparta’s regime stability, along with distinctive features of the social system of ancient Sparta, namely the coordinated social uses of systematic violence, the public façade of material equality among the citizen population, the maintenance of a self-enforcing regime of austerity by an extensive body of citizens. In addition, it uses a dynamic element to explain the severe demographic decline that led to Sparta’s eventual loss of standing in the Greek world.

  • Ending a Century of Violent Labor Conflict: A New Perspective on Unionization and the National Labor Relations Act,” (with Margaret Levi, Tania Melo, and Frances Zlotnick). Working Paper, Hoover Institution, Stanford University, September 2016.  DOWNLOAD HERE.

Open access to labor organizations lagged nearly a century behind open access to business organizations, arising as part of the New Deal in the mid-1930s. During the century previous to the New Deal, firms and governments actively suppressed labor organization, frequently resorting to violence. Conflict and violence ended with the National Labor Relations Act (NLRA) of 1935.

Why did the violence associated with labor last for a century? What did the NLRA do to solve this problem, and why couldn’t Congress have done so earlier? In this paper, we develop a new perspective on labor organization and violence that addresses these questions. We argue that the century-long violence surrounding labor resulted from an inability to solve a series of commitment problems. All three parties to the violence – labor, business, and government – faced commitment problems. We show that the NLRA succeeded because it finally solved the commitment problems underlying the century of labor violence.

  • Executive Constraint, Political Stability and Economic Growth” (with Gary W. Cox). Working Paper, Hoover Institution, Stanford University, February 2015. Forthcoming, Journal of Legal Analysis. DOWNLOAD HERE.

Previous studies have argued that democracy diminishes the extent to which contests over political leadership depress economic growth, by reducing the violence and uncertainty attendant on such contests. We reconsider the theoretical basis for this claim, highlighting the separate roles of executive constraint and electoral accountability. Exploiting panel data from 1850-2005, we show that the executive’s horizontal accountability to the legislature significantly moderates the economic downturns associated with leadership turnover, while its vertical accountability to the electorate does not. These results suggest that, in terms of moderating succession-related downturns and thereby promoting steadier economic growth, the health of legislatures is more important than the health of elections.

  • The Violence Trap: A Political-Economic Approach to the Problems of Development (with Gary W. Cox and Douglass C. North) Working Paper, Hoover Institution, Stanford University, February 2015. DOWNLOAD HERE.

Why do developing countries fail to adopt the institutions and policies that promote development?  Our answer is the violence trap.  The trap is set by the unavoidable interdependence of economic and political development:  key political reforms—opening access and reducing the risk of state predation—are typically feasible only when the economy reaches a given level of specialization (greater economic integration raises the costs of violence); yet the economy typically can reach high levels of specialization only when key political reforms are in place (for standard reasons).  The trap entails violence because, as we show, the structure of unreformed polities (aka “natural states”) ensures poor adaptive efficiency:  following shocks to the distribution of military and economic power, bargaining to adjust to the shocks often fails among those with access to violence, due to problems of asymmetric information and commitment. Indeed, we show that violence is endemic in the developing world, with the median regime experiencing violent leadership turnover once every 8 years.  The trap is hard to escape because whenever overt violence breaks out, leaders seeking to restore order face an unspecialized economy, to which the best response is yet another unreformed polity.  Indeed, the limits on access and rents characteristic of natural states are instrumental to re-establishing peace.  Yet, these rents and limits also deter specialization, thereby keeping the costs of resorting to force low and ensuring that future bargaining will be in the shadow of viable military “outside” options. Finally, we argue that most other forms of poverty traps implicitly involve the violence trap.

  • Development and Political Theory in Classical Athens (with Federica Carugati and Josiah Ober). Working Paper, Hoover Institution, Stanford University. June 2015 (forthcoming, Polis.) DOWNLOAD HERE.

Recent work has focused on the emergence of Greek political thought as a response to Athenian democracy. But, in addition to its political breakthrough to democracy, Athens underwent a profound  social and legal transformation in the classical period.  Without understanding this larger transformation we cannot adequately explain the development of Greek political thought. Between the late 6th and 4th centuries BC, Athens transitioned from an undeveloped, limited access, ‘natural state’ toward a developed open access society – a society characterized by impersonal, perpetual and inclusive political, economic, legal and social institutions that protected individual rights and sustained the polis’ exceptional growth

Some of those who witnessed this transformation first-hand attempted to grapple, often critically, with its implications for politics, social relations, and moral psychology. We show that Thucydides, Plato, and other Greek political thinkers devoted a considerable part of their work to analyzing the polis’ tendency toward political but also economic, social, and legal inclusion. Such a tendency, as many of them recognized, made Athens stand out among other Greek poleis, despite the fact that Athens was a democracy, not because of it. Democracy, therefore, is not the only explanatory variable in these accounts.

  •  “Is Development Uniquely Modern? Athens on the Doorstep (with Federican Carugati and Josiah Ober), Working Paper, Hoover Institution, Stanford University, November 2015. DOWNLOAD HERE.

Is development uniquely modern? Economists and political scientists define development in terms of features that are unique to modernity, such as high GDP growth, liberalism, and centralization. In this paper, we deploy the case of ancient Athens as an existential counter to these theories. Moving from CNWW’s definition of development as the transition from ‘natural state’ to ‘open access,’ we contend that the ancient polis of Athens was, in many relevant respects, ‘developed.’ The development path followed by ancient Athens illustrates how development requires, at a minimum, a) security against arbitrary acts of violence and b) predictability, provided by reasonably fair rules and their reasonably impartial application and reliable enforcement. As in modern liberal democracies, in Athens these institutions were associated with sustained growth in state capacity and in per capita consumption. Our definition highlights intuitive requirements of development that existing definitions fail to stress. Moreover, our definition suggests, empirically, that development does not depend on a set of specific institutions that have been hard to establish, let alone consolidate, in modern developing countries.

  • Institutions and the Political Science of Animal Cooperation” (with Erol Akçay, Joan Roughgarden, James Fearon, John Ferejohn, et al.) Working Paper, Hoover Institution, Stanford University, May 2013. DOWNLOAD HERE.

Social evolution is one of the most rapidly developing areas in evolutionary biology. A main theme is the emergence of cooperation among organisms, including the factors that impede cooperation. Although animal societies seem to have no formal institutions, such as courts or legislatures, we argue that biology presents many examples where an interaction can properly be thought of as an informal institution, meaning there are evolved norms and structure to the interaction that enable parties to reach mutually beneficial outcomes. These informal institutions are embedded in the natural history of the interaction, in factors such as where and when parties interact, how long and how close they stay together, and so on. Institutional theory thus widens the scope of behavioral ecology by considering not only why animals evolve to choose the strategies they choose, but also asking both why it is that they find themselves in those particular interaction setups and how these particular interactions can be sustained. Institutions frequently enable interacting parties avoid inefficient outcomes and support efficient exchange among agents with conflicting interests.

The main thesis of this paper is that the organization of many biological interactions can properly be understood as institutions that enable mutually beneficial outcomes to be achieved relative to an unstructured interaction. To do this, institutions resolve or regulate the conflicts of interests among parties. The way conflicts of interests affect the outcome depends on the structure of the interaction, which can create problems of commitment, coordination and private information. Institutional theory focuses on how to address each of these issues, typically focusing on the development of social norms, rules, and other constraints on individual behaviors. We illustrate our thesis with examples from cooperative breeding and genes as within-body-mechanism-design.

  • Equilibrium Federal Impotence: Why the States and Not the American National Government Financed Infrastructure Investment in the Antebellum Era,” (with John Joseph Wallis), Working Paper, Hoover Institution, Stanford University, September 2012. DOWNLOAD HERE.

How are public goods provided in practice? Economics has long-established normative principles of the assignment of public goods provision to different levels of government (Musgrave 1959, Oates 1972). For example, public goods that affect the nation or that have high spillovers across states should be provided by the national government. Yet, when we turn to the most important public goods investments in economic development in early America, we observe that the states were the principal providers despite enormous positive spillovers. Between 1787 and 1860, the national government’s $54 million on promoting transportation infrastructure while the states spent $450 million.

Using models of legislative choice, we show that neither Congress nor the state legislatures could finance projects that provided benefits to a minority of districts while spreading the taxes over all. However, states were able to solve this problem by using benefit taxation – for example, by assessing property taxes on the basis of the expected increase in value due to an infrastructure investment. In contrast, the federal government could not do the same because the U.S. Constitution prohibited it from using benefit taxation. Federal  inaction was the result of the equilibrium political forces in Congress in combination with the institutional rules. The combination resulted in an equilibrium federal impotence.

  • A Dynamic Theory of Congressional Organization (with David W. Rohde and Edward H. Stiglitz), Working Paper, Hoover Institution, Stanford University, February 2013. DOWNLOAD HERE.

For three decades, questions about congressional organization have been at the center of the literature on Congress. In various efforts, theorists attempt to characterize the three defining eras of congressional organization: the textbook era, the reform era, and the partisan era following the Republican revolution. Yet each of these theories is capable of capturing only a single era, so that the literature lacks a general theory of the statics and dynamics of congressional organization over the last half century. Appealing to the concepts of negative and positive agenda powers, we develop a theory that explains the central eras of congressional organization since WWII as well as the transitions between the eras. We apply the theory to the U.S. House in an analytical narrative covering the postwar period.

  • Limited Access Orders in the Developing World: Rethinking the Problems of Development (with Douglass C. North, John Joseph Wallis, and Steven B. Webb). Working Paper, Hoover Institution, Stanford University, March 2012. DOWNLOAD HERE.

The paper provides a new framework for understanding problems of development. It emphasizes that all societies must solve the problem of violence and distinguishes between two ways in which societies solve this problem. Limited access orders, covering most developing countries today, solve the problem of violence by granting political elites privileged control over parts of the economy, each getting some share of the rents.  Since outbreaks of violence reduce the rents, elite factions have incentives to refrain from violence most of the time.  Stability of the rents and thus of the social order requires limiting access and competition. In contrast, open access orders, which dominate the modern developed world, control the problem of violence through open access and competition. The framework has new implications for understanding development. It shows that transplanting institutions from open access orders into limited access orders – such as markets, elections, and corporate law – often do not have their intended effect because the institutions work differently under limited access than open access. When development policy advice threatens the logic of stability in limited access orders, these societies often resist or sabotage the recommended measures.

  • “The Untold Story of the 1964 Civil Rights Act: How the GOP Helped the Democrats Destroy the Solid South” (with Daniel B. Rodriguez), Working Paper, Hoover Institution, Stanford University (2006). DOWNLOAD HERE.

This paper draws on our larger study of the politics surrounding the passage of the landmark 1964 Civil Rights Act, “The Positive Political Theory of Legislative History: New Perspectives on the 1964 Civil Rights Act and its Interpretation” (with Daniel B. Rodriguez) University of Pennsylvania Law Review (April, 2003) 151(4): 1417-1542. The larger study presents a new understanding of the act’s passage.

In this short piece, we focus on the political motives of the Republicans to help pass the 1964 act. We argue that President Lyndon Johnson expressed the idea while signing the act, “I think we just gave the South to the Republicans.”

 (2) Resting Papers (Papers I Wish I’d Published!)

Working papers carry a pretense that they may yet be worked on, revised, and published. In contrast, resting papers have sat for a sufficient period that this pretense is no longer credible. Although these papers are more or less permanently at rest, I regret not taking the time to publish them.

  • “Tragic Brilliance: Equilibrium Party Hegemony in Mexico” (with Alberto Diaz-Cayeros and Beatriz Magaloni), Working Paper, Hoover Institution, Stanford University, March 2007. DOWNLOAD HERE.

Why do citizens acquiesce in regimes of which they obviously disapprove? We provide a model that exhibits a general mechanism underlying the survival of one-party dominant, authoritarian regimes. The “tragic brilliance” of these systems lies in that the party in power employs a complex system of rewards and punishments that lead citizens, including many opponents, to actively support it. Specifically, localities that fail to support the incumbent party receive lower fiscal transfers. We apply our approach to shed light on the long-standing hegemonic dominance in Mexican politics by the PRI. We model the PRI’s credible threat to punish localities electing the opposition. Our empirical investigations provide evidence for the punishment regime.

  • “Ideas, Interest, and Credible Commitments in the American Revolution” (with Jack Rakove and Andrew R. Rutten), Working Paper, Hoover Institution, Stanford University, February 2000. DOWNLOAD HERE.

The dominant view among historians is that the American Revolution was based on ideas, such as liberty, freedom, and constitutionalism (Bailyn, Greene, Morgan, Reid, Wood). A major omission in the literature is that it fails to explain why anyone would fight for these ideas; or, put differently, the literature misses an instrumental account of Americans’ decisions. We provide an answer to this question, namely, that the changes in the British policy given the constitution decisions amassed over the previous one hundred years effectively broke the credible commitments protecting American liberties. We show how the ideas central to the literature fit with our approach. We also show that how the American radicals and the British interacted in a way that eventually convinced the moderates to join the radicals in revolution.

We continue to maintain some hope to rewrite this paper so it can be published, although that requires a major rewrite and update.

In a companion paper, we use the concept of self-confirming equilibrium to explain another aspect of the American Revolution; namely, how the British and Americans could have cooperated for over 100 years only to become involved in a major conflict:

“Rationality, Inaccurate Mental Models, and Self-Confirming Equilibrium: A New Understanding of the American Revolution” (with Rui J.P. de Figueiredo, Jr., and Jack Rakove) Journal of Theoretical Politics (2006).

  • “Rational Choice and Freudian Accounts of Cooperation” (with Debra Friedman). Working Paper, Hoover Institution, Stanford University, April 1993. DOWNLOAD HERE.

In this paper we discuss one of the richest psychological conceptions of individuals – that offered by Sigmund Freud – in relation to rational choice theory. The purpose is twofold. First, we use coordination games to translate some of Freud’s ideas into a choice theoretic framework; including the three central components of Freudian psychoanalysis, the id, ego, and superego. Second, we use this framework to suggest a deeper and richer psychological characterization of the individual within the choice theoretic framework. Freud’s more complex view of individuals provides a potentially deeper understanding of social interaction within the rational choice approach.

We focus on Freud’s Civilization and Its Discontents (1930) to discuss both the rational choice and the Freudian conception of the relationship between the individual and society, to note points of commonality and divergence, and to understand the consequences of these differences for models of social behavior. Freud makes two theoretical contributions in this work. The first parallels recent scholarship in rational choice in discussing the relationship between individual behavior and social outcomes.  Both approaches emphasize, for example, that individuals bear a cost for participating in schemes of social cooperation and interaction.

In Civilization and Its Discontents, Freud goes beyond this idea, attempting to show the implications of his interpretation of society for the individual, an analysis absent from rational choice analysis.  Freud argues that individuals bear a psychological cost in fulfilling the demands and obligations of civilization. Participation in society requires that individuals suppress their desires in order to realize the gains from cooperation. The implications from the second part of Freud’s analysis allow us to study the limits of the standard rational choice conception of the individual.

NB. Were we to rewrite this paper today, we would embed the discussion in the explosion of literature in behavioral economics drawing on aspects of psychology to enrich models of human behavior.

  • “The Fugitive Slave Act of 1850: Symbolic Gesture or Rational Guarantee?” (with Jeffrey Rogers Hummel), Working Paper, Hoover Institution, Stanford University, January 2006. DOWNLOAD HERE.

Passage of the Fugitive Slave Act as part of the Compromise of 1850 remains a puzzle. First, most historians dismiss the problem of runaway slaves because their number seems too small. Second, many historians follow Potter in arguing that the Fugitive Slave Act was counterproductive. Because the draconian measure provoked northern opposition against slavery, it contributed to the crisis between the sections. Why did slaveholders insist upon this measure? A standard answer is to emphasize the symbolic nature of the Act. Southerners “clamored . . . for a stronger fugitive slave law,” writes James M. McPherson, “less for practical advantage than as a matter of principle…. [N]orthern aid to escaping slaves was an insult to southern honor.” 

We have two problems with the symbolic interpretation, one economic, one political. Economically, we demonstrate that Southern demand for the act reflected rational concerns about runaways when one considers the most valuable slaves, prime age males in the border South, and one excludes the old, inform, young, and mothers, in addition to all slaves in the deep South. Politically, we argue that the Act was important for coalition purposes. To retain a political balance in the nation, Southerners needed on-going political support from their Northern coalition partners. Given the growing Northern animosity to slaves, it was unclear whether the South’s coalition partners could deliver. We argue that passage of the fugitive slave law provided a costly signal from Northerners that, despite their animosity to slavery, they could still help pass pro-Southern measures.

This paper is a companion to our first paper on this topic: “The Fugitive Slave Act of 1850: An Instrumental Interpretation” (With Jeffrey Rogers Hummel), in David W. Brady and Mathew D. McCubbins, eds., Party, Process, and Political Change in Congress, vol 2: “Further New Perspectives on the History of Congress.” (Stanford: Stanford University Press, 2007).

  • “Strategically Speaking: A New Analysis of Presidents Going Public” (with Joshua D. Clinton, David E. Lewis and Stephanie R. Cellini) Working Paper, Hoover Institution, Stanford University, July 2004. DOWNLOAD HERE.

Scholars of the American presidency have used formal theory of American politics to study a variety of presidential activities including vetoes, budgets, unilateral action, and appointments.  We extend this approach to study the phenomenon of the president “going public”; that is, to expend costly advertising, time, and resources on some measures instead of others. Abstracting from idiosyncratic features of individual presidents and embedding presidential public activity in the larger separation of powers system illuminates three different logics undergird public activity, namely, legislator preferences, which constrain the president; claiming credit for the passage of legislation; and making veto threats credible.  Embedding the president in a strategic setting reveals none obvious results about the issues on which presidents choose to go public.

  • “Vicious Cycles: Endogenous Political Extremism and Political Violence” (with Rui J.P. de Figueiredo, Jr.), Working Paper, Hoover Institution, Stanford University, October 2001. DOWNLOAD HERE.

Why do terrorists terrorize? In this paper, we join the growing set of accounts drawing on rational accounts to provide useful insights into the incidence and persistence of terrorist (and anti-terrorist) behavior in societies with deep cleavages that might promote terrorism (for example, Northern Ireland, Israel, Sri Lanka, Indonesia, and India). Our purpose in this regard is two-fold: First, our approach helps define conditions under which particular patterns of violence and terrorism—partly identified by competing explanations—prevail. And second, we make predictions about the type and character of interactions between terrorists and the majorities they seek to terrorize.

  • “Structural Change in Congress: The Demise of the Joint Committee on Atomic Energy” (with Linda R. Cohen and McNollgast). Working Paper, Hoover Institution, Stanford University, May 1991. DOWNLOAD HERE.

Nuclear power and its regulation became one of the biggest environmental controversies of the late 1960s and 1970s. This confrontation involved almost all aspects of American national government: Congress and the president, new legislation, regulatory agencies, various interest groups, and major court cases. Within Congress, environmentalist proponents felt locked out of deliberations about nuclear power, unable to influence the seemingly all powerful Joint Committee on Atomic Energy (JCAE) which held jurisdiction over nuclear power, including its promotion and regulation. Locked out of the JCAE, environmentalists sought other means of influence. One was the New Environmental Policy Act of 1969 that forced all agencies, including the Atomic Energy Commission (AEC), to undertake environmental impact statements. Another environmentalist strategy was to contest the AEC’s regulatory proceedings concerning the construction and operation of nuclear power plants.

Growing strength of the environmentalists combined with declining enthusiasm for nuclear power to result in many changes, both within Congress and in how the United States regulated nuclear power. First, Congress dismantled the JCAE, with its jurisdiction split among multiple committees. Second, the pro-nuclear power AEC was also dismantled, split into the Nuclear Regulatory Commission, which retained the AEC’s regulatory activities; and what ultimately became the Department of Energy, which took over the AEC’s promotional activities. In this paper, we use standard models of American politics to explain these events.

  • “Structure and Strategy: The Two Faces of Agenda Power” (with Kenneth A. Shepsle). Working Paper, Center for the Study of American Business, Washington University, St. Louis, August 1981. DOWNLOAD HERE.

We published the first half of this long paper as “Uncovered Sets and Sophisticated Voting Outcomes with Implications for Agenda Institutions” American Journal of Political Science (1984).

We never published the second half of this paper (beginning on p 37). This part contains an early sketch of the now standard way of studying the impact of legislative rules. We then propose a game theoretic model of the choice among rules governing amendment procedures in a legislature that votes on proposals using majority rule.

Most real world legislatures have a myriad of features constituting agenda formation: committees, motions, rules governing amendments and motion-making, power of recognition, etc. In order to understand policy choice in different legislatures, we need a theory of legislative institutions. This requires the development of a theory of agenda formation under constraints and decentralization.

In particular, we study institutions based on those of the House of Representatives in the mid- to late 20th century. We define the Legislative Committee – Rules Committee game (LCRC). The legislative committee (LC) may make a proposal to which amendments may then be offered. A second committee, called the rules committee (RC), is then has the power to order, add to, or delete from the set of amendments offered by other members. In general, the RC grants a “rule” specifying the constraints governing the amendment process. We simplify the process by assuming that RC allows one amendment of its choosing

The sequence of play is as follows. LC announces a bill, B, to be considered against the current status quo, Q. RC then announces whether to grant a rule allowing the proposal, and if so, it may also announce an amendment, A. The legislature then votes A against B, winner against Q.

In a one dimensional spatial setting, we characterize the equilibrium outcome of this game as a function of the status quo and RC and LC’s ideal points.

  • “Retrospection, Present Value, and Incumbent Electoral Strategies: A Political Benefit-Cost Calculus” (with Kenneth A. Shepsle and Christopher Johnsen). Working Paper, Center for the Study of American Business, Washington University, St. Louis, Spring 1980. DOWNLOAD HERE.

This paper is a companion paper to three published papers listed below on legislative choice with Ken Shepsle. This unpublished paper uses the same approach to study a range of questions, including how to study public policies generally, as opposed to distributive or pork barrel politics. The paper provides insights into the provision of public goods and policies aimed at correcting externalities. It also explores the implications for the different ways in which voters might reward their representatives for benefits that accrue over time, including various form of retrospective voting. (Please excuse the late 1970’s printing technology!)

The published papers in this group are:

(i) The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics (with Kenneth A. Shepsle and Christopher Johnsen), Journal of Political Economy (1981);

(ii) “Political Preferences for the Pork Barrel: A Generalization,” (with Kenneth A. Shepsle). American Journal of Political Science (1981); and

(iii) “Political Solutions to Market Problems,” (with Kenneth A. Shepsle). American Political Science Review (1984).

  • “Fenno on the House Appropriations Committee: Or How to Construct a Nash Equilibrium Without Really Trying.” Notes, Hoover Institution, Stanford University, September 1995. DOWNLOAD HERE.

Richard Fenno’s classic paper, “The Appropriations Committee as a Political System,” American Political Science Review 56:310-24 (1962),  provides an explanation for the House Appropriations Committee’s success on passing its measures on the House floor. These notes show that Fenno constructs a Nash equilibrium as part of his argument about this success, all using the then dominant language of political sociology.