Hobbes, Thomas, 1651, Leviathan: Or the Matter, Forme and Power of a Commonwealth, Ecclesiasticall and Civil

"For the Lawes of Nature (as Justice, Equity, Modesty, Mercy, and (in summe) Doing To Others, As Wee Would Be Done To,) if themselves, without the terrour of some Power, to cause them to be observed, are contrary to our naturall Passions, that carry us to Partiality, Pride, Revenge, and the like. And Covenants, without the Sword, are but Words, and of no strength to secure a man at all, (Ch. XVIII).

Hobbes, Thomas, 1651, Leviathan: Or the Matter, Forme and Power of a Commonwealth, Ecclesiasticall and Civil

"[A] State is a human community that (successfully) claims the monopoly of the legitimate use of physical force within a given territory."

Weber, Max, 1919, Politics as a Vocation

“If men were angels, no government would be nec- essary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself,” (Federalist 51).

Hamilton, Madison, & Jay, 1788, The Federalist Papers

“Stop throwing the constitution in my face, the constitution is just a goddamn piece of paper!”

“A political system is federal if is has both

1. A hierarchy of governments, each is autonomous in its own well-defined sphere of authority

2. The autonomy of each government is institutionalized in a manner that respect is self-enforcing”

Quoted in Weingast (1995) p.4

Weingast, Barry R, 1995, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics, & Organization 11(1): 1-31

• Argentina is a great example of what not to do, on paper, very decentralized

• Provinces have primary responsibility for education, health, poverty, housing, infrastructure, primary tax collection, etc

• But all provinces' tax revenues go to national government to be redistributed back to provinces

  • Most provinces finance less than 20% of their own spending

• What incentives does this create?

Sanguinetti, Pablo and Mariano Tommasi, 2001, "Fiscal Federalism in Argentina: Policies, Politics, and Institutional Reform," Journal of the Latin American and Caribbean Economic Association

• Provincial governments spend other people's money but tax their citizens to fund other provinces!

• Thus, each province sets their spending high but taxes low

• Argentine federal government has repeatedly had to bail out provinces

  • Local governments face a "soft budget constraint"

Sanguinetti, Pablo and Mariano Tommasi, 2001, "Fiscal Federalism in Argentina: Policies, Politics, and Institutional Reform," Journal of the Latin American and Caribbean Economic Association

In addition to Riker's definition, for federalism to be "market-preserving", must also:

3) subnational governments have primary regulatory responsibility over the economy

4) a common market is ensured

5) lower governments face a hard budget constraint

Weingast, Barry R, 1995, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics, & Organization 11(1): 1-31

"The fundamental political dilemma of an economic system is this: A government strong enough to protect property rights and enforce contracts is also strong enough to confis- cate the wealth of its citizens. Thriving markets require not only the appropriate system of property rights and a law of contracts, but a secure political foundation that limits the ability of the state to confiscate wealth," (p.1)

Weingast, Barry R, 1995, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics, & Organization 11(1): 1-31

"The answer concerns the design of political institutions that credibly commit the state to preserving markets, that is, to limits on the future political discretion with respect to the economy that are in the interests of political officials to ob- serve...these limits must be self-enforcing...political officials must have an incentive to abide by them," (p.2, emphasis in original).

Weingast, Barry R, 1995, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics, & Organization 11(1): 1-31

Weingast, Barry R, 1995, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics, & Organization 11(1): 1-31

"In the language of game theory, we are searching for an equilibrium to a game in which the government has the opportunity to violate constraints but chooses not to" (p. 10)

Weingast, Barry R, 1995, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics, & Organization 11(1): 1-31

Weingast, Barry R, 1995, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics, & Organization 11(1): 1-31

Weingast, Barry R, 1995, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics, & Organization 11(1): 1-31

Weingast, Barry R, 1995, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics, & Organization 11(1): 1-31

• Need institutions to coordinate agreement on beliefs about what constitutes an infringement of rights

• Very long story short: constitutions (written, like the U.S. Constitution, or unwritten, like the U.K.) allow citizens to coordinate their beliefs to allow a sovereign to credibly commit to not overstepping bounds

Weingast, Barry R, 1995, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics, & Organization 11(1): 1-31

• Local governments generate economic growth

• Leads to more local tax revenue, rents for officials

• Local governments have strong interest in preserving markets, preserves their own interests (tax revenue)

Weingast, Barry R, 1995, "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics, & Organization 11(1): 1-31

“As long as both sides suffer some costs for fighting, then war is always inefficient ex post—both sides would have been better off if they could have achieved the same final resolution without suffering the costs (or by paying lower costs). This is true even if the costs of fighting are small, or if one or both sides viewed the potential benefits as greater than the costs, since there are still costs. Unless states enjoy the activity of fighting for its own sake, as a consumption good, then war is inefficient ex-post,” (p.383).

Fearon, James, 1995, “Rationalist Explanations for War,” International Organization 49(3): 379-414

“The central question, then, is what prevents states in a dispute from reaching an ex ante agreement that avoids the costs they know will be paid ex post if they go to war?" Giving a rationalist explanation for war amounts to answering this question,” (p.383).

Fearon, James, 1995, “Rationalist Explanations for War,” International Organization 49(3): 379-414

“The central question, then, is what prevents states in a dispute from reaching an ex ante agreement that avoids the costs they know will be paid ex post if they go to war?" Giving a rationalist explanation for war amounts to answering this question,” (p.383).

Fearon, James, 1995, “Rationalist Explanations for War,” International Organization 49(3): 379-414

“I propose that there are three defensible answers, which take the form of general mechanisms...In the first mechanism, rational leaders may be unable to locate a mutually preferable negotiated settlement due to private information about relative capabilities or resolve incentives to misrepresent such information...Second, rationally led states may be unable to arrange a settlement that both would prefer to war due to commitment problems, situations in which mutually preferable bargains are unattainable because one or more states would have an incentive to renege on the terms,” (p.381).

Fearon, James, 1995, “Rationalist Explanations for War,” International Organization 49(3): 379-414

“As argued by John Harsanyi, if two rational agents have the same information about an uncertain event, then they should have the same beliefs about its likely outcome. The claim is that given identical information, truly rational agents should reason to the same conclusions about the probability of one uncertain outcome or another. Conflicting estimates should occur only if the agents have different (and so necessarily private) information,” (p.392).

Fearon, James, 1995, “Rationalist Explanations for War,” International Organization 49(3): 379-414

“Consider the problem faced by two gunslingers with the following preferences. Each would most prefer to kill the other by stealth, facing no risk of retaliation, but each prefers that both live in peace to a gunfight in which each risks death. There is a bargain here that both sides prefer to "war"—namely, that each leaves the other alone-but without the enforcement capabilities of a third party, such as an effective sheriff, they may not be able to attain it. Given their preferences, neither person can credibly commit not to defect from the bargain by trying to shoot the other in the back,” (p.402).

Fearon, James, 1995, “Rationalist Explanations for War,” International Organization 49(3): 379-414

“Note that no matter how far the shadow of the future extends, iteration (or repeat play) will not make cooperation possible in strategic situations of this sort. Because being the "sucker" here may mean being permanently eliminated, strategies of conditional cooperation such as tit-for-tat are infeasible,” (p.402).

Fearon, James, 1995, “Rationalist Explanations for War,” International Organization 49(3): 379-414

“Preemptive war scenarios provide the analogy. If geography or military technology happened to create large first-strike or offensive advantages, then states might face the same problem as the gunslingers,” (p.402).

Fearon, James, 1995, “Rationalist Explanations for War,” International Organization 49(3): 379-414

“In words (roughly), if B's expected decline in military power is too large relative to B's costs for war, then state A's inability to commit to restrain its foreign policy demands after it gains power makes preventative attack rational for state B,” (p.402).

Fearon, James, 1995, “Rationalist Explanations for War,” International Organization 49(3): 379-414

"In 12 of 16 past cases in which a rising power has confronted a ruling power, the result has been bloodshed."

Allison, Graham, 2015, “The Thucydides Trap: Are the U.S. and China Headed for War?”, The Atlantic