Political Studies zyxwvuts (1996), zyxwvu XLIV, zyxwvu 605-619 Economical Constitutions GEOFFREY BRENNAN AND ALAN HAMLIN Introduction The idea of an economical constitution is not self evident. The major task of this introduction must therefore be to offer and briefly defend a particular inter- pretation of this idea. The major task of the remainder of the chapter is then to provide an account of the primary constitutional mechanisms that may be employed within an ‘economical constitution’, the operating characteristics of these mechanisms, and the potential indirect and interaction effects associated with mechanisms of different types.’ Our general purpose is to set out and recommend an economical approach to constitutional analysis which modifies the orthodox economic strategy in order to accommodate a range of concerns which, we believe, are important in the constitutional context. The orthodox economic approach’s inability to address these concerns has led some non- economists to dismiss the economic approach altogether as an unsatisfactory basis for constitutional analysis. We believe that this dismissal is too hasty, although we concede that some economists’ claims for the success of the orthodox economic approach have equally been too extreme. In this way we hope to suggest to economists that some revision of their basic approach is appropriate if they are to develop a fully rounded constitutional analysis, and to non-economists that the economic approach, thus revised, provides a powerful and appropriate basis for the analysis of constitutional design and reform. A preliminary distinction to be made is that between an economical consti- tution and an economic constitution. An economic constitution is concerned with the constitutional and institutional structure of the economy and, perhaps, of economic policy. Thus, an economic constitution might specify the procedures and institutions involved in wage determination, or in the setting of interest rate policy. By contrast, the term ‘economical constitution’ is intended to refer to an economic approach to the general problem of consti- tutional design. It is not the domain of the constitution that is at issue, but rather the mode of argument used to analyse questions of constitutional design and the principles that are invoked to judge alternative constitutions.* An economical constitution, first and foremost, is a constitution that is derived ’ We shall take for granted the general importance of the constitutional perspective in this chapter. We offer arguments in support of this view in G. Brennan and A. P. Hamlin ‘Consti- tutional political economy: the political philosophy of Homo economicus?, Journal zyx of Political Philosophy, 3, 3 (1995), 280-303. For related recent arguments which do not derive from an economic perspective see S. L. Elkin and K. E. Soltan (eds), A New Constitutionalism (Chicago, University of Chicago Press, 1993). * Of course, an economical approach to constitutional design may involve an economic constitution, as in G. Brennan and J. M. Buchanan, The Power to Tax (Cambridge, Cambridge University Press, 1980), but equally an economic constitution may derive from non-economical zy argurnen ts. OPolitical Studies Association 1996. Published by Blackwell Publishers, zyxwvu 108 Cowley Road, Oxford OX4 IJF. UK and 238 Main Street, Cambridge, MA 02142, USA.