IREF - Institute for Research in Economic and Fiscal issues
Fiscal competition and economic freedom
WP 2018-05. Executive Summary.
Although public opinion and most of the academic community reject libertarian anarchy, explaining why governments are legitimate remains a major and much neglected problem. This paper discusses the foundations of social-contract theorising with emphasis on the Hobbesian approach. It then examines the constitutional alternatives (including Buchanan’s) and draws three main critical conclusions. First, the Hobbesian construction is not a social contract dictated by nature, since the individuals’ instinct to survive does not necessarily justify the presence of a watchman. Second, the constitutional contract takes the status quo for granted, fails to identify the signatories, and ignores the presence of dissenters. Finally, Buchanan’s version of the constitutional approach shares the Hobbesian perspective, and focuses on describing the bargaining process, rather than on assessing the legitimacy of government. Although it is a fitting description of the context prevailing in today’s Western democracies, Buchanan’s view ends up replacing the rule of law dear to the classical-liberal tradition with the rule of compromise.
To download the paper, please click on the icon below.