Table Of ContentSTUDIES IN PUBLIC CHOICE
studies
in
Public
choice
VOl. 1
Editor: Gordon Tullock
The intersection of economics and 'Politics
The intersection of economics and politics is one of the
most important areas of modern social science. Public
Choice, as a journal, and the series, Studies in Public
Choice, are devoted to a particularly important aspect
of this intersection, the use of economic methods on
matters which are traditionally political. Prominent
scholars, such as Duncan Black, Kenneth Arrow, Mancur
Olson, Vincent Ostrom, and James Buchanan, have con
tributed to the development of the study of public choice;
notably some were originally economists and some political
scientists. The journal Public Choice (now in its twelfth
year) and the monograph series are devoted to furthering
the growth of knowledge in this important and fascinating
field.
Fiscal responsibility
in constitutional
democracy
James M. Buchanan
and
Richard E. Wagner
Virginia Poly technical Institute and State University
Social Sciences Division
c:Nfartinus~ijhoff
GLeiden 1978
I~oston
Distributors for North America
Kluwer Boston, Inc.
160 Old Derby Street
Hingham, MA 02043 USA
ISBN 978-1-4684-7127-4 ISBN 978-1-4684-7125-0 (eBook)
DOT 10.1007/978-1-4684-7125-0
Copyright @ 1978 by H. E. Stenfert Kroese B. V., Leiden
Softcover reprint of the hardcover 1st edition 1978
No part of this book may be reproduced in any form by print, photoprint, microfilm or
any other means, without written permission from the publisher
v
PREFACE
This volume contains the papers, along with the discussant's re
marks, presented at a conference on 'Federal Fiscal Responsibility',
held at The Homestead, Hot Springs, Virginia, on 26-27 March
1976. Additionally, we, the editors, have included an introductory
essay which sets forth some of our background thoughts that in
formed our organization of the conference and which also de
scribes some of our reactions to the conference.
This conference was sponsored by the Liberty Fund, Inc. of
Indianapolis, Indiana, which incorporated this conference into its
overall program directed toward the study of the ideals of a free
society of responsible individuals. Related to this effort, the
Liberty Fund also assisted in supporting research on Democracy in
Deficit: The Political Legacy of Lord Keynes, by James M.
Buchanan and Richard E. Wagner (New York: Academic Press,
1977). Both Democracy in Deficit and the conference were de
signed to examine one important aspect of the Liberty Fund's
general set of concerns, namely the' way in which political con
siderations influence the macroeconomic aspects of budgetary
policy, thereby, in turn, influencing the future of American liberty
and prosperity. We are most grateful to the Liberty Fund for their
efforts, and we are pleased that Enid Goodrich, William Fletcher,
Neil McLeod, and Helen Schultz of the Liberty Fund were able to
attend the conference.
The organization of the conference was handled through the
Center for Study of Public Choice, specifically through the cheerful
VI PREFACE
and capable efforts of Mrs. Betty T. Ross. For her graciousness
and generosity, we are exceedingly grateful. This volume is pub
lished in the Public Choice Monograph Series, and we are thank
ful to Gordon Tullock, editor of the series, for his helpfulness.
The general theme of Fiscal Responsibility in Constitutional De
mocracy is, of course, quite pertinent to the theme of this series.
CONFERENCE PARTICIPANTS VII
Armen A. Alchian, University of California, Los Angeles
William Breit, University of Virginia
Martin Bronfenbrenner, Duke University
James M. Buchanan, Virginia Polytechnic Institute and State
University
J esse Burkhead, Syracuse University
Colin Campbell, Dartmouth College
Otto A. Davis, Carnegie-Mellon University
Marilyn R. Flowers, University of Oklahoma
Donald F. Gordon, Simon Fraser University
C. Lowell Hariss, Columbia University
Thomas F. Johnson, American Enterprise Institute
Charles Knerr, University of Texas at Arlington
J. Clayburn LaForce, University of California, Los Angeles
Abba P. Lerner, Queen's College, City University of New York
William H. Meckling, University of Rochester
David Meiselman, Virginia Polytechnic Institute and State
University
Michael E. Levy, The Conference Board, Inc.
William A. Niskanen, Ford Motor Company
Mancur Olson, University of Maryland
Alan Reynolds, First National Bank of Chicago
Warren J. Samuels, Michigan State University
Wilson E. Schmidt, Virginia Polytechnic Institute and State
University
VIII CONFERENCE PARTICIPANTS
Herbert Stein, University of Virginia
Robert D. Tollison, Virginia Polytechnic Institute and State
University
Gordon Tullock, Virginia Polytechnic Institute and State
University
Melville J. Ulmer, University of Maryland
Richard E. Wagner, Virginia Polytechnic Institute and State
University
Burton A. Weisbrod, University of Wisconsin
Edwin G. West, Carleton University
CONTENTS
v
Preface . . . . .
Conference participants VII
1. Contemporary Democracy and the Prospect for Fiscal Control:
Initial thoughts about and Final Reactions to the Conference
James M. Buchanan and Richard E. Wagner . . . . . . .
2 Starving the Leviathan: Balanced Budget Prescriptions Before Keynes
William Breit . . . . . . . . . . . . . . . . . .. 9
Comments
Donald F. Gordon 24
E. G. West. . . 28
3. The Decline of the Budget-Balancing Doctrine or How the Good Guys
Finally Lost
Herbert Stein. . . . . " . . . . . . . . . . . . . 35
Comments
Armen A. Alchian 53
Colin D. Campbell 55
4. Keynesianism: Alive, If Not So Well, At Forty
Abba P. Lerner . . . . . . . . . 59
Comments
Gordon Tullock 70
Melville J. Ulmer . 74
5 The Political Biases of Keynesian Economics
James M. Buchanan and Richard E. Wagner 79
Comments
William H. Meckling. 101
Mancur Olson. . . 106
6. Congressional Budget Reform: New Decision Structures
Jesse Burkhead and Charles Knerr . . . . . 119
Comments
C. Lowell Harriss . 145
Warren J. Samuels 151
x CONTENTS
7. The Prospect for a Liberal Democracy
William A. Niskanen. . . . . . 157
Comments
Martin Bronfenbrenner . 174
Robert D. Tollison . . 177
