Abstract
Taking the approach of the superfirm, we characterize government organization through six different features. First, citizens are viewed as sovereign owners of a superfirm; elected officials are employees of the sovereign citizens. Second, in analogy to the economic principle of the division of labor and specialization, a division of labor between five independent branches of government is advocated: the legislative, the budgetary, the executive, the law enforcement, and the judiciary branch. Third, we do not suggest a mechanism of checks and balances between government branches but deal with the threat of tyranny using the principle of separation of decision control and decision management developed by Eugene Fama and Michael Jensen. Fourth, with election as a decision control device, we demarcate the constituency of the budgetary branch by age groups to provide an explicit control mechanism for intertemporal and intergenerational trades. Fifth, to strengthen sovereign citizens' decision control, the powers to recall elected chief public servants, to declare emergency and war, to sign into international treaties, and to amend the constitution are vested with a national assembly. Sixth, there is no head of state.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Breton, A. (1989) “The Growth of Competitive Governments.”Canadian Journal of Economics 22(4): 717–50.
Breton, A. (1991) “The Organization of Competition in Congressional and Parliamentary Governments.” In: Galeotti, G., Salmon, P., and Wintrobe, R. (eds.)The Competitive State. Dordrecht: Kluwer Academic Publishers.
Brennan, G., and Buchanan, J. M. (1977) “Toward a Tax Constitution for Leviathan.”Journal of Public Economics 8: 255–73.
Buchanan, J. M., and Tullock, G. (1962)The Calculus of Consent. Chicago: The University of Chicago Press.
Buchanan, J. (1969)Cost and Choice. Chicago: The University of Chicago Press.
Buchanan, J. M., and Wagner, R. E. (1977)Democracy in Deficit. New York: Academic Press.
Chang, S. H., and Gordon, L. H. D. (1991)All Under Heaven: Sun Yat-sen and His Revolutionary Thought. Stanford: Hoover Institutional Press.
Cheung, S. N. S. (1983) “The Contractual Nature of Firm.”Journal of Law and Economics 26: 1–21.
Coase, R. H. (1937) “The Nature of the Firm.”Economica 4: 386–405.
Coase, R. H. (1960) “The Problem of Social Cost.”Journal of Law and Economics 3: 1–44.
Coase, R. H. (1988)The Firm, the Market, and the Law. Chicago: University of Chicago Press.
Coase, R. H. (1991)The Nature of the Firm: Origins, Evolution, and Development. Volume edited by O. Williamson and S. Winter. Oxford: Oxford University Press.
Comes, R., and Sandler, T. (1986)The Theory of Extemalites, Public Goods, and Club Goods. Cambridge: Cambridge University Press.
Domes, J. (1989) “China's Modernization and the Doctrine of Democracy.” In: Cheng, C.-Y. (ed.) Sun Yat-sen's Doctrine in the Modern World, 201–25. Boulder: Westview Press.
Dow, G. (1987) “The Function of Authority in Transaction Cost Economics.”Journal of Economic Behavior and Organization 8: 13–38.
Downs, A. (1957)An Economic Theory of Democracy. New York: Harper and Row.
Edigi, M. (1992) “Organizational Learning, Problem Solving and the Division of Labor.” In: Edigi, M., and Moms, R. (eds.)Economics, Bounded Rationality and the Cognitive Revolution. Vermont: Edward Elgar Publishing Company.
Encyclopedia Britannica (1979) “Constitutions and Constitutional Law.” Vol. 5: 84. Chicago: Encyclopedia Britannica Inc.
Fama, E. F., and Jensen, M. C. (1983) “Separation of Ownership and Control.”Journal of Law and Economics 16: 301–25.
Gregor, A. J., and Chang, M. H. (1989) “The Thoughts of Sun Yat-sen in Comparative Perspective.” In: Cheng, C.-Y. (ed.)Sun Yat-sen's Doctrine in the Modern World, 103–37. Boulder: Westview Press.
Hayek, F. A. v. (1960)Constitution of Liberty. Chicago: The University of Chicago Press.
Hayek, F. A. v. (1973)Law, Legislation, and Liberty, Vol. 1: Rules and Order. Chicago: The University of Chicago Press.
Hayek, F. A. v. (1978) “Competition as a Discovery Procedure.” In:New Studies in Philosophy, Politics, Economics, and History of Ideas. Chicago: The University of Chicago Press.
Hayek, F. A. v. (1979) “A Model Constitution.” Chap. 17 in Law, Legislation, and Liberty, Vol. 3: The Political Order of a Free People. Chicago: The University of Chicago Press.
Hayek, F. A. v. (1980a) “The Use of Knowledge in Society.” In:Individualism and Economic Order. Chicago: The University of Chicago Press.
Hayek, F. A. v. (1980b) “The Meaning of Competition.” In:Individualism and Economic Order. Chicago: The University of Chicago Press.
Hayek, F. A. v. (1980c) “The Economic Conditions of Interstate Federalism.” In:Individualism and Economic Order. Chicago: The University of Chicago Press.
Hsü, L. S. (1933)Sun Yat-sen, His Political and Social Ideas: A Source Book. Los Angeles: University of Southern California Press.
Kan, S. S. (1993) “Entrepreneurship, Transaction Costs, and Subjectivist Economics.”Journal of Enterprising Culture 1(2): 159–82.
Kindermann, G.-K. (1989) “An Over View of Sun Yat-sen's Doctrine.” In: Cheng, C.-Y. (ed.)Sun Yat-sen's Doctrine in the Modern World, 52–78. Boulder: Westview Press.
Kirzner, I. M. (1992)The Meaning of Market Process: Essays in the Development of Modern Austrian Economics. London: Routledge.
Lobel, J. (1986) “Covert War and Congressional Authority: Hidden War & Forgotten Power.”University of Pennsylvania Law Review 134: 1035–78.
Madison, J. (1964) “The Separation of Powers: A Hedge against Tyranny?” Paper 48 in Hacker, A. (ed.)The Federalist Papers. New York: Washington Square Press.
Matsusaka, J. G. (1992) “Economics of Direct Legislation.”Quarterly Journal of Economics 107(May): 541–72.
Menger, C. ([1981])Principles of Economics. Trans. by J. Dingwall and B. F. Hoselitz. New York: New York University Press.
Pagano, U. (1991) “Property Rights, Asset Specificity, and the Division of Labor under Alternative Capitalist Relations.”Canadian Journal of Economics 15: 315–42.
Rosenberg, N. (1976) “Another Advantage of Division of Labor.”Journal of Political Economy 84(4): Part 1, 861–68.
Tocqueville, A. de ([1835] 1945)Democracy in America. Transl. by H. Reeve. Vintage Books.
Tullock, G. (1965) “Constitutional Mythology.”New Individualist Review September: 12–17.
Twight, C. (1988) “Government Manipulation of Constitutional-level Transaction Costs: A General Theory of Transaction Cost Augmentation and the Growth of Government.”Public Choice 56: 131–52.
Weingast, B. R. (1992) “Constitution as Governance Structures: The Political Foundation of Secure Markets.”Journal of Institutional and Theoretical Economics 149(1): 286–311.
Weingast, B. R., and Marshall, W. J. (1988) “The Industrial Organization of Congress; or, Why Legislatures, Like Firms, Are Not Organized as Markets.”Journal of Political Economy 96(1): 132–62.
Wittman, D. (1989) “Why Democracies Produce Efficient Results.”Journal of Political Economy 97(6): 1395–1424.