nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2006‒04‒22
eleven papers chosen by
Erik Thomson
University of Chicago

  1. Making a World of Difference? Habermas, Cosmopolitanism and the Constitutionalization of International Law By Neil Walker
  2. Law’s Legitimacy and Democracy-Plus By Wojciech Sadurski
  3. Scrutinizing Discrimination: a Conceptual and Normative Analysis of Legal Equality By Wojciech Sadurski
  4. Country Size and the Rule of Law: Resuscitating Montesquieu By Hansson, Gustav; Olsson, Ola
  5. Science, Beliefs and Knowledge: A Personal Reflection on Robert J. Aumann’s Approach By Gil Kalai
  6. Democratic capital: The nexus of political and economic change By Torsten Persson; Guido Tabellini
  7. Hedonic Capital By Liam Graham; Andrew J. Oswald
  8. Why Does Democracy Need Education? By Edward Glaeser; Giacomo Ponzetto; Andrei Shleifer
  9. Why and how to measure stock market fluctuations? The early history of stock market indices, with special reference to the French case. By Pierre-Cyrille Hautcoeur
  10. A.K. Sen et J.E. Roemer : une même approche de la responsabilité ? By Herrade Igersheim
  11. Teaching urban history in Italian universities By Giovanni Favero; Paola Lanaro

  1. By: Neil Walker
    Abstract: This paper examines the explicit linkage in the recent work of Habermas between cosmopolitanism and the constitutionalization of international law. Whereas previous thinking on the constitutionalization of international law has tended either towards the utopianism of world government or the modest ambition of attaching the constitutional label to certain material developments in transnational regulation – in particular the human rights regimes and the institutional structure of the UN as developed through state agreement – Habermas looks for an intermediate solution. This would involve a modest range of institutions and functions at the global level, in particular around peace and human rights, but founded on a broader and more popular basis than state agreement. The potential and urgency of the Habermas proposal lies in its opposition less to the other constitutional visions and more to the alternative and increasingly tangible prospect of a lop-sided international regime dominated by American perspectives.
    Keywords: constitution building; legitimacy; international agreements; multilevel governance; law
    Date: 2005–12–01
  2. By: Wojciech Sadurski
    Abstract: Is it the case that the law, in order to be fully legitimate, must not only be adopted in a procedurally correct way but must also comply with certain substantive values? In the first part of the paper I prepare the ground for the discussion of legitimacy of democratic laws by considering the relationship between law’s legitimacy, its justification and the obligation to obey the law. If legitimacy of law is seen as based on the law being justified (as in Raz’s “service conception”), our duty to obey it does not follow automatically: it must be based on some additional arguments. Raz’s conception of legitimate authority does not presuppose, as many critics claim, any unduly deferential attitude towards authorities. Disconnection of the law’s legitimacy from the absolute duty to obey it leads to the central part of the paper which consists in a critical scrutiny of the claim that the democratically adopted law is legitimate only insofar as it expresses the right moral values. This claim is shown to be, under one interpretation (“motivational”), nearly meaningless or, under another interpretation (“constitutional”), too strong to survive the pressure from moral pluralism. While we cannot hope for a design of “pure procedural democracy” (by analogy to Rawlsian “pure procedural justice”), democratic procedures express the values which animate the adoption of a democratic system in the first place.
    Date: 2005–12–01
  3. By: Wojciech Sadurski
    Abstract: Legal equality is a particularly troublesome ideal: it is at the same time non-negotiable (occupying a position lexically prior to other legal ideals shared by its proponents) and fundamentally ambiguous. The principal task for a theory of equality is to design a test for non-discriminatory classifications. This paper argues that no version of a “per-se theory”(relying on the belief that certain characteristics of individuals, when used as a basis for classifications, necessarily render a classification discriminatory) can be satisfactory. The main lesson of the critique of “per se” theories developed in this paper is that any test of nondiscriminatoriness of classifications which ignores legislative purpose, and the relationship between classification and purpose, is doomed to fail. But relevance-based tests yield a circularity which results from the temptation of implying a classification’s purpose from the terms of the classification itself. This danger can be overcome by heightening the level of scrutiny applied to the purpose, and to the fit between the classification and the purpose. However, we need some good reasons for heightening the level of scrutiny of the legislation, and these reasons must be embedded in a general theory of what renders a classification discriminatory. Such a theory can be reached by a method of “reflective equilibrium”, that is, by reflecting upon the common evils of those discriminations which we consider intuitively to be particularly invidious. An intuitively justified answer to this question seems to be that a classification is tainted as discriminatory by certain wrongful motives for legislation, in particular, if the legislation is based on prejudice, hostility and stereotyping. But it is not easy to ascertain those motives directly, so that we need some more “objective” indicia of suspectness of classification; those indicia, again, can be gathered in by thinking about the common traits of undoubtedly invidious discriminations.
    Date: 2005–12–01
  4. By: Hansson, Gustav (Department of Economics, School of Business, Economics and Law, Göteborg University); Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The political and economic impact of country size has been a frequently discussed issue in social science. In accordance with the general hypothesis of Montesquieu, this paper demonstrates that there is a robust negative relationship between the size of country territory and a measure of the rule of law for a large cross-section of countries. We propose that there are two main reasons for this regularity; firstly that institutional quality often has the character of a local public good that is imperfectly spread across space from the capital to the hinterland, and secondly that a large territory usually is accompanied by valuable rents that tend to distort property rights institutions. Our empirical analysis further shows that whether the capital is centrally or peripherally located within the country matters for the average level of rule of law. <p>
    Keywords: country size; rule of law; institutions; development; Montesquieu
    JEL: N40 N50 P33
    Date: 2006–03–28
  5. By: Gil Kalai
    Abstract: On the occasion of Robert J. Aumann's being awarded the 2005 Nobel Prize in Economics, this paper gives a personal view on some of Aumann's contributions, and primarily on his approach to foundational issues in game theory, economics, and science as a whole. It is based on numerous discussions and e-mail exchanges we had in the 1990's, dealing with various scientific and political matters, including our long debate on the ``Bible Code'' controversy.
    Date: 2006–04
  6. By: Torsten Persson; Guido Tabellini
    Abstract: We study the joint dynamics of economic and political change. Predictions of the simple model that we formulate in the paper get considerable support in a panel of data on political regimes and GDP per capita for about 150 countries over 150 years. Democratic capital — measured by a nation’s historical experience with democracy and by the incidence of democracy in its neighborhood — reduces the exit rate from democracy and raises the exit rate from autocracy. In democracies, a higher stock of democratic capital stimulates growth in an indirect way by decreasing the probability of a sucessful coup. Our results suggest a virtuous circle, where the accumulation of physical and democratic capital reinforce each other, promoting economic development jointly with the consolidation of democracy.
  7. By: Liam Graham (University College London); Andrew J. Oswald (University of Warwick and IZA Bonn)
    Abstract: This paper proposes a new way to think about happiness. It distinguishes between stocks and flows. Central to the analysis is a concept we call ‘hedonic capital’. The paper sets out a model of the dynamics of wellbeing in which bad life-shocks are smoothed by the drawing down of hedonic capital. The model fits the patterns found in the empirical literature: the existence of a stable level of wellbeing and a tendency to return gradually towards that level. It offers a theory of hedonic adaptation.
    Keywords: adaptation, wellbeing, evolution, happiness, habituation
    JEL: D1 I3
    Date: 2006–04
  8. By: Edward Glaeser; Giacomo Ponzetto; Andrei Shleifer
    Abstract: Across countries, education and democracy are highly correlated. We motivate empirically and then model a causal mechanism explaining this correlation. In our model, schooling teaches people to interact with others and raises the benefits of civic participation, including voting and organizing. In the battle between democracy and dictatorship, democracy has a wide potential base of support but offers weak incentives to its defenders. Dictatorship provides stronger incentives to a narrower base. As education raises the benefits of civic participation, it raises the support for more democratic regimes relative to dictatorships. This increases the likelihood of democratic revolutions against dictatorships, and reduces that of successful anti-democratic coups.
    JEL: D72 D74 H11
    Date: 2006–04
  9. By: Pierre-Cyrille Hautcoeur
    Abstract: Stock market indices are today a vital and daily tool for both economists and actors in the financial world. The multiplication and the very importance given to these indices raise the question of their accuracy and of the reliability of the methods that are used to construct them. We begin an investigation on these questions by studying the early history of these indices. We show that stock market indices appeared in the daily press in the United States at the end of the 19th century; that around World War One, they became the focus of the interest of very different groups of people, so that their construction became a more complex and specialized task. The scientific study of indices did not result initially from the stock market's importance in finance (for firms financing, for savers' portfolio choices or for investment banks' decisions), since most of the initial interest came from economists that looked at the stock market only as a measure or an index of the macroeconomic situation. The development of indices dedicated to financial studies came only in the late 1920s, and accelerated only with the birth of modern finance. This article describes the origins of stock-market indices in the interwar period, with an emphasis on France and the United States. It links this evolution with contemporary economic theories, index number theory, financial practices, and the other motivations of their authors. It examines the consequences of the methodological choices that were made and suggests that they had a surprisingly large impact on the results. In particular, we analyse in detail the motivations and technical characteristics of the most important indices that were produced during the interwar period by the French government statistical office (the Statistique générale de la France or SGF). We suggest that these indices cannot be easily compared to most usually discussed indices for other countries and that new calculations are required before international comparisons.
    Date: 2006
  10. By: Herrade Igersheim
    Date: 2006
  11. By: Giovanni Favero (Department of Economics, University Of Venice Cà Foscari); Paola Lanaro (Department of Economics, University Of Venice Cà Foscari)
    Abstract: This paper presents the situation of Urban History teaching in Italian universities, using the results of a web search and of an inquiry performed among Italian teachers by means of a form distribution and collection.
    Keywords: urban history, teaching, Italy
    JEL: I21 N01
    Date: 2006

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