Constitutional economics facts for kids

Constitutional economics is a way of studying how economics and constitutionalism work together. It's often called "the economic look at constitutional law." This field tries to explain how the rules in a country's constitution are chosen. These rules limit what economic and political groups can do.

Constitutional economics also checks if the government's economic choices match the economic rights of its citizens. For example, how a country shares its money and resources is a big deal for every nation. Constitutional economics aims to connect the economic rights of people with the government's economic plans.

Who Started Constitutional Economics?

The idea of "constitutional economics" was first used in 1982 by an American economist named Richard McKenzie. Later, another American economist, James M. Buchanan, made it a well-known academic subject.

Buchanan won the Nobel Prize in Economic Sciences in 1986. He received it for his work on how economic and political decisions are made, based on agreements and constitutional rules.

Buchanan believed that the state (the government) is not always wiser than its citizens. This idea is a main part of constitutional economics. He thought that every constitution is made to last for many generations. So, it needs to balance the interests of the government, the society, and each person.

Some people think that constitutional economics can be seen as the modern "science of making laws." More and more people are interested in this field. Because of this, new academic magazines, like "Constitutional Political Economy" (started in 1990), have been created.

Why is it Important for Developing Countries?

Constitutional economics focuses a lot on how a country's wealth should be shared fairly. Many countries that are changing or growing their economies still see their constitutions as just legal papers. They don't always connect them to the country's actual economic plans.

About three-quarters of all independent countries still have governments that control almost everything in their national economy. In these places, regular citizens or groups of people don't have much say in how the country's money is shared.

This is why constitutional economics is extra important for countries where the political and economic systems are changing. In these places, the government often doesn't respect the economic rights of its citizens as written in their constitution.

Related pages

• Budget
• Constitution
• Constitutionalism
• Economics
• Democracy
• Government
• Parliament
• Political economy
• Rule of Law
• James M. Buchanan
• Welfare state

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  Constitutional economics was made popular by James M. Buchanan, who won the 1986 Nobel Memorial Prize in Economic Sciences for his work.

See also

In Spanish: Economía constitucional para niños