Constitutional Structure and Economic Outcomes

A few days ago, F.H. Buckley, a professor at the George Mason School of Law (and McGill law graduate and former professor) published in the National Post an op-ed arguing that the Canadian constitutional system, and in particular its lack of separation of powers, serves us rather well by helping maintain a free economy and a fiscally prudent government, especially compared to “America’s second-rate constitutional system.” His colleague, Ilya Somin, has a reply at The Volokh Conspiracy, arguing that those economic outcomes would, on average, be more secure in a “separation of powers system” like that of the United States. I am skeptical of both claims.

Prof. Buckley’s main criticism of the American constitutional system is that it creates gridlock: “[g]etting legislation passed or repealed in America is like waiting for three cherries to line up in a Las Vegas slot machine. Absent a supermajority in Congress to override a presidential veto, one needs the simultaneous concurrence of the president, Senate and House.” (He might have added that at present, the situation is made worse by the routine requirement of 60 votes for a bill to pass the Senate – rather than the simple majority of 51.)

By contrast, “[i]n a parliamentary system … one needs only one cherry. In Canada, neither the governor-general nor the senate has a veto power,” (though this would change, he notes, if the Senate were elected). This means that legislation is easier to enact, to change, or to repeal. And while there might be dangers in enacting legislation too quickly, we mostly find out about a law’s strengths and weaknesses over time, rather than by studying it carefully before adopting it, so it is more important to be able to amend bad legislation than to have good ex-ante mechanisms to prevent its enactment in the first place. Furthermore, because a Prime Minister is, if only indirectly, elected by the entire country, he has an incentive to serve the national interest, rather than that of a small number of constituents, as an American congressman. (Prof. Buckley also discusses the issue whether the Prime Minster has too much power, but I will not address it here.)

Prof. Somin responds by pointing out that by the same economic measures prof. Buckley relies on to demonstrate Canada’s superiority, the United States was doing better until not so long ago. And its current problems, in particular the massive increase in public spending under presidents George W. Bush and Barack Obama, are not due to gridlock. He also observes that bad laws create interest groups attached to their continued existence, so that ease of repeal might be a theoretical rather than a practical advantage. Better to learn from the experience of other countries, and screen out bad laws before they are enacted. Finally, parliamentary systems – not least Canada’s – are also prone to pork-barrel spending and unequal distribution of public benefits. Parliamentarism might be preferable on other grounds, but good economic governance favours separation of powers.

There are several problems with the arguments on both sides. One is a certain confusion over the meaning of the term “separation of powers.” In his recent essay on the separation of powers, Jeremy Waldron points out that it is often used to mean not just, literally, a separation of the legislative, executive, and judicial functions of government, but also one or more “of a close-knit set of principles that work both separately and together as touchstones of political legitimacy.” These include, in addition to separation of powers narrowly understood, “[t]he principle that counsels against the concentration of too much political power in the hands of any one person, group, or agency”; “[t]he principle of checks and balances, which requires the ordinary concurrence of one governmental entity in the actions of another”; and bicameralism. The reasons for gridlock in the U.S. constitutional system is not separation of powers. It is the checks and balances that require agreement of Congress and the President to enact legislation, and the strong bicameralism that gives the Senate a say equal with that of the House of Representatives in the enactment of legislation. Conversely, it is the absence of these checks and balances and the weakness of our second chamber that make the Canadian system so brutally efficient, for good and evil.

But more substantively, I doubt that one can establish strong long connections between specific features of a constitutional structure and macroeconomic outcomes. Neither prof. Buckley nor prof. Somin explains just how the presence or absence of checks and balances (or “separation of powers”) contribute to economic freedom or fiscal discipline. As prof. Somin points out, where a country stands on those measures can change relatively quickly, even though its constitutional structure remains constant, and even in the absence of fundamental shifts in how its political system operates. There are also differences in how various American states, or Canadian provinces, perform on these measures, despite their constitutional system being largely similar (especially in the case of Canadian provinces). Internationally, the American constitutional system is unique among rich countries, which undermines the validity of any comparisons.

Although some very general links between features of a constitutional structure and economic outcomes seem plausible – it makes sense to suppose that a democratic constitution will make for a less corrupt government than one that provides for no political competition – more specific effects, if there are any, are probably overshadowed by those of all sorts of other factors: culture, geography, international relations, you name it. Political organization of a much “lower” level than constitutional structure – the financing of political parties, the inner workings of a legislature or of executive agencies, etc. – probably matters too, quite possibly no less than the constitutional structure of a polity. It seems to me that it makes more sense to evaluate constitutional structures on with reference to “touchstones of political legitimacy,” to borrow Waldron’s expression, than possible economic outcomes.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s