Constitutional Political Economy and Economic Policy

Abstract

　Normative constitutional political economy of Virginia School has achieved to explain modern democracies from individualistic foundations. Starting from the three core premises, namely the methodological individualism, rational behaviors of acting entities and transactions, the establishment of governments are successfully explained using the two-stage social contracts model. In this setting a "veil of uncertainty" is a crucial concept which make a self-interested individual act fairly. But the notion of normative constitutional political economy has several controversial points when applied to policy advices.

　In this paper I investigate the methodological foundation of normative constitutional political economy as well as its underlying social philosophy. When applying it to a policy advice, it has a strong advantage of methodological consistencies to other normative assertions such as the explicit declare principle of value premises. But the normative individualism of normative constitutional political economy will gain its validity in modern democracies only with the unanimous support of individuals involved.