Contents -- Preface -- Acknowledgements -- 1. Introduction -- 1.1 Political Economy with a Benevolent Monarch -- 1.2 The Design of Democratic Institutions -- 1.3 Political Economy in Democratic Countries -- 1.4 The Chicago View of Interest Group Politics -- 1.5 The Complete Contracting Approach -- 1.6 The Incomplete Contracting Approach -- 1.7 Adding Asymmetric Information -- 1.8 Endogenous Coalition formation -- I: Politicians as Informed Supervisors -- 2. The Complete Contract Approach to Constitutional Design -- 2.1 Introduction -- 2.2 A Simple Supervision Model -- 2.3 Optimal Incentives for the Politician -- 2.4 Conclusion -- Appendix 2 -- 3. An Incentive Theory of the Separation of Powers -- 3.1 Introduction -- 3.2 Separation of Powers and Yardstick Competition -- 3.3 A Model with Three Types -- 3.4 Single Non-benevolent Politician -- 3.5 Separation of Politicians -- 3.6 Generalization of the Results -- 3.7 Conclusion -- Appendix 3 -- 4. Checks and Balances -- 4.1 Introduction -- 4.2 The Model -- 4.3 Optimal Symmetric Constitution -- 4.4 Supervision and Division of Tasks -- 4.5 Multidimensional Collusion Activities -- 4.6 A Model with Three Politicians -- 4.7 Optimal Supervisory Structures -- 4.8 Conclusion -- Appendix 4 -- II: Flexibility Versus Discretion in Constitutional Design -- 5. Political Economy and Industrial Policy -- 5.1 Introduction -- 5.2 Political Interference in the Rent-Efficiency Trade-off -- 5.3 Ownership Matters -- 5.4 Incentives against Capture as a Constitutional Rule -- 5.5 Political Price Discrimination Versus Uniform Pricing -- 5.6 Information Asymmetries, Costly Redistribution and the Cost of Democracy -- 5.7 Conclusion -- Appendix 5 -- 6. Political Economy and the Marginal Cost Pricing Controversy -- 6.1 Introduction -- 6.2 The Marginal Cost Pricing Rule -- 6.3 Frisch's Comment -- 6.4 Smith, Edgeworth, Hotelling.

6.5 Project Selection and Pricing Rules -- 6.6 Conclusion -- Appendix 6 -- 7. Toward a Political Theory of the Emergence of Environmental Incentive Regulation -- 7.1 Introduction -- 7.2 The Basic Model -- 7.3 Controlling the Discriminatory Power of Politicians through Constraints on the Choice of Instruments -- 7.4 Delegating Discriminatory Power to the Politicians -- 7.5 Multiple Privately Informed Interest Groups -- 7.6 Conclusion -- Appendix 7 -- III: Coalition Formation and Constitutional Design -- 8. Optimal Constitutional Response to Coalition Formation -- 8.1 Introduction -- 8.2 The Model -- 8.3 Modeling Collusion -- 8.4 Collusion under Complete Information -- 8.5 Collusion under Complete Information with Extended Mechanisms -- 8.6 Collusion under Incomplete Information -- 8.7 Conclusion -- Appendix 8 -- 9. Collusion and Decentralization -- 9.1 Introduction -- 9.2 The Independent Case -- 9.3 The Independent Case with Limits on Communication -- 9.4 Risk Aversion -- 9.5 Conclusion -- 10. Concluding Remarks -- Appendix. Translations of Passages Quoted in French -- References -- Index -- A -- B -- C -- D -- E -- F -- G -- H -- I -- J -- K -- L -- M -- N -- O -- P -- Q -- R -- S -- T -- U -- V -- W -- Y -- Z.