Economics has much to do with incentives--not least, incentives to work hard, to produce quality products, to study, to invest, and to save. Although Adam Smith amply confirmed this more than two hundred years ago in his analysis of sharecropping contracts, only in recent decades has a theory...

Incentives and Political Economy constructs a normative approach to constitutional design using recent developments in contract theory. It treats political economy as the study of the incentive problems created by the delegation of economic policy to self-interested politicians. Politicians are...