Constitutional economics explores the rules of the game in a market economy

Author: Wang Xiaowei
Publisher:
Publish Date: 2006-01-01
Features: This book conducts a study on the formation of the traditional economic system and the process of economic transformation from the perspective of constitutional economics, aiming to provide a tentative explanation for the economic transformation of a country like China, which historically lacks constitutional resources. The book introduces and explores the general theory of constitutional economics, focusing on a comparative study of the constitutional economic thoughts and models of figures such as Adam Smith, Hayek, and Buchanan. Using evolutionary game theory tools, it analyzes the origin and evolution of rights, proposes the concept of meta-constitutionalism, and discusses the economic implications of the constitution. From the perspective of an official third-party enforcer, it explains the causes of the "government paradox" and its institutional solutions. On this basis, the book serves as a theoretical application and tentative explanation for China's economic transformation. Starting from the realities of the transforming economy and addressing the limitations of the government-market dichotomy, it proposes an analytical framework of constitutional-government-market trichotomy. Based on a quantitative analysis of government factors, it presents the basic conclusion of this paper: effective constitutional rules are the fundamental rules of the market economy; constitutional institutions and market institutions are a set of complementary institutional arrangements; only with the establishment of constitutionalism can the distance between government and market be effectively defined.