What determines the size and form of redistributive programs, the extent and type of public goods provision, the burden of taxation across alternative tax bases, the size of government deficits, and the stance of monetary policy during the course of business and electoral cycles? A large and rapidly growing literature in political economics attempts to answer these questions. But so far there is little consensus on the answers and disagreement on the appropriate mode of analysis.Combining the best of three separate traditions--the theory of macroeconomic policy, public choice, and rational choice in political science--Torsten Persson and Guido Tabellini suggest a unified approach to the field. As in modern macroeconomics, individual citizens behave rationally, their preferences over economic outcomes inducing preferences over policy. As in public choice, the delegation of policy decisions to elected representatives may give rise to agency problems between voters and politicians. And, as in rational choice, political institutions shape the procedures for setting policy and electing politicians. The authors outline a common method of analysis, establish several new results, and identify the main outstanding problems.

The authors of The Economic Effects of Constitutions use econometric tools to study what they call the "missing link" between constitutional systems and economic policy; the book is an uncompromisingly empirical sequel to their previous theoretical analysis of economic policy. Taking recent theoretical work as a point of departure, they ask which theoretical findings are supported and which are contradicted by the facts. The results are based on comparisons of political institutions across countries or time, in a large sample of contemporary democracies. They find that presidential/parliamentary and majoritarian/proportional dichotomies influence several economic variables: presidential regimes induce smaller public sectors, and proportional elections lead to greater and less targeted government spending and larger budget deficits. Moreover, the details of the electoral system (such as district magnitude and ballot structure) influence corruption and structural policies toward economic growth.Persson and Tabellini's goal is to draw conclusions about the causal effects of constitutions on policy outcomes. But since constitutions are not randomly assigned to countries, how the constitutional system was selected in the first place must be taken into account. This raises challenging methodological problems, which are addressed in the book. The study is therefore important not only in its findings but also in establishing a methodology for empirical analysis in the field of comparative politics.

How will the private sector react to different governmental policies? What policies will produce the most desirable outcomes? These two volumes bring together major contributions to a new theory of macroeconomic policy that analyzes which policies are credible or politically feasible, topics that are central to the practical policy debate but that traditional theory cannot address.Instead of looking at policy as an end product, the contributors approach policy as an ongoing process of revised goals, changes in tactics, and political pressures. They consider what kinds of incentives, within different institutional settings, drive policymaking and the behavior of policymakers. This approach allows more informed answers to questions of which policies are credible and which are politically feasible. It explains why certain monetary and fiscal policies get implemented, and provides insights into situations that occur repeatedly in macroeconomic policy such as the bias toward government deficits, partisan competition, and central bank independence.Volume 1 examines problems of policy credibility caused by incentives to deviate from announced policy. Volume 2 looks at feasibility problems caused by political pressures generated by the electoral process, the politics of the public debt, issues of the redistribution of wealth, and conflict over the need for economic reforms. Sections are arranged so that the first chapter introduces a topic while those that follow expand on it. The editors provide substantial introductions to each volume as well as short comments at the beginning of each section within the volumes.