Public Choice Theory and Constitutional Jurisprudence
PUBLIC CHOICE THEORY AND CONSTITUTIONAL JURISPRUDENCE
Inasmuch as the public is often adversely affected by special interest legislation, it has a strong incentive to devise institutional mechanisms—like constitutions—that make passage of such legislation more difficult. Before one can gauge whether a constitution is designed to promote the general welfare of the public by impeding the efficacy of interest groups or to advance the interests of particular groups within society, it is necessary to establish guidelines by which the "public-regardingness" of a constitution can be evaluated.
The most objective means of evaluating a constitution is to examine the actual effects of the document on interest group behavior. If the constitution establishes mechanisms that facilitate rent-seeking, it is reasonable to infer that the Framers intended to encourage this result. If, on the other hand, the constitution establishes mechanisms that retard such activity by making it more costly, one can also infer that these costs were intended.
james madison's formal, publicly articulated pronouncements indicate that controlling the ability of interest groups to achieve antimajoritarian outcomes in the legislature was a primary goal of the U.S. Constitution. As we see from examining "hidden-implicit" legislation, however, it is often impossible to draw conclusions about the intentions of those who make law simply by evaluating their public pronouncements. Thus while the Framers stated publicly that reducing the political power of factions was a central feature of their constitutional design, an even more convincing indication that the Constitution was intended to promote the public interest is found by examining the results of the Framers' work.
One who observes the impressive success of interest groups in obtaining favorable legislation might conclude either that the Constitution has failed in its attempt to impede interest groups or that it was not designed to impede their activities in the first place. Such a conclusion would be erroneous.
The formation of a representative democracy establishes what economists refer to as an "agency relationship." An agency relationship calls for one person or group of people (the principal) to hire another person or group of people (the agent) to perform services and make decisions on the principal's behalf. The contract is successful for the contracting parties if it accurately anticipates postcontractual problems and deals with these problems in cost-effective ways.
In a representative democracy, the contract that initiates this agency relationship is its constitution. The principals are the citizens, and the agents are the officials they elect. Elected officials, like all agents, are inevitably more concerned with maximizing their own utility than with maximizing the utility of their principals. This divergence of interests (called "agency costs") is an inevitable feature inherent in any principal-agent relationship—including, perhaps especially, the one that exists between voters and their elected representatives. The agency costs inherent in representative democracy manifest themselves in side bargains between interest groups and legislators.
Because of the high cost of monitoring the behavior of elected officials, the expected costs to the officials of such behavior is low, and the benefits are high. The goal of a public-regarding constitution, then, is to establish mechanisms (such as the separation of powers) and institutions (such as the independent judiciary) that make rent-seeking by interest groups more costly by reducing the benefits that legislators can realize. However, there are inevitable costs associated with establishing the very mechanisms and institutions that retard rent-seeking.
Because rent-seeking cannot be eliminated without cost, one cannot conclude that a constitution seeks to facilitate rent-seeking merely because it fails to eliminate it entirely. In fact, rational principals will expend resources to control the behavior of their agents only up to the point at which the marginal costs of such expenditures equals the marginal benefit in terms of reduced rent-seeking. The test of whether the Framers intended to eliminate rent-seeking, then, should not be whether the Constitution eliminates all rent-seeking, but how effectively it provides mechanisms that align the interest of elected representatives with those of the public generally. Under this test, the mechanisms and institutions established in the Constitution indicate a purpose to minimize special interest bargains.
Public choice theorists have suggested economic reasons why constitutions are likely to be more public-regarding than other forms of law. One is that special interest groups are unlikely to agree to constitutional rules that make life easier for other special interest groups. Rules that facilitate rent-seeking generally are likely to cost each separate special interest group more in the way of wealth transfers to other groups than the group itself can expect to receive from the transfers it obtains. Thus, even special interest groups that might benefit from some specific, discrete legislative wealth transfers are likely to object to general constitutional provisions that facilitate rent-seeking.
Finally, since the life of a constitutional rule is much longer than the effective life of a statute, the present value of the cost to the public of a constitutional rule that is not public-regarding will be much greater than the cost of an identical statutory rule. This greater cost will tend to mitigate the free-rider problem that plagues the public in the normal legislative arena.
Support for the hypothesis that the American Constitution is a public-regarding document, structured to favor the general polity over special interest groups can be derived from Article I, which sets forth the size and composition of the legislature. Building on the theoretical work of James Buchanan and Gordon Tullock, Robert McCormick and Robert Tollison have demonstrated empirically that for a fixed number of total legislators, interest groups fare better in the market for legislation where the legislators are distributed equally between the two houses of a bicameral legislature. Therefore, if the Constitution was designed to make interest group bargains less costly, we would expect Article I to require the U.S. house of representatives and U.S. senate to be of equal size. Yet, consistent with a public-regarding view of the Constitution, Article I plainly envisions a wide disparity in membership size between the House and the Senate.
In addition, where the members of each house of a bicameral legislature represent different constituencies, and where the two houses must concur to pass a law, it is more difficult for discrete factions to ensure the passage of legislation that furthers their interests. Thus the Constitution has imposed what is, in effect, a supermajority rule of voting, which raises decision costs and makes favorable treatment less likely for special interest groups. The same analysis applies to the executive veto power, which enables the executive branch to act as a third house of the legislature, thus further raising the costs to interest groups.
The first amendment guarantees of freedom of speech and freedom of the press, the commerce clause, the privileges and immunities clause, the equal protection clause, the due process clause, the contract clause, and the eminent domain clause also support the hypothesis that the Constitution was designed to impede rather than advance rent-seeking. The fact that the Constitution establishes a multitude of mechanisms to deter the efficacy of interest groups is strong evidence that the Framers intended this deterrence. Even the direct democratic process by which the Constitution was enacted ensured that it would be a public-regarding document. Thus, it is likely that the influence of interest groups on the content of the Constitution was less than the influence of such groups on the content of ordinary, day-to-day legislation.
Jonathan R. Macey