The rise of modern public finance revolutionized political economy. As governments learned to invest tax revenue in the long-term financial resources of the market, they vastly increased their administrative power and gained the ability to use fiscal, monetary, and financial policy to manage their economies. But why did the modern fiscal state emerge in some places and not in others? In approaching this question, Wenkai He compares the paths of three different nations—England, Japan, and China—to discover why some governments developed the tools and institutions of modern public finance, while others, facing similar circumstances, failed to do so.

Focusing on three key periods of institutional development—the decades after the English Civil Wars, the Meiji Restoration, and the Taiping Rebellion—He demonstrates how each event precipitated a collapse of the existing institutions of public finance. Facing urgent calls for revenue, each government searched for new ways to make up the shortfall. These experiments took varied forms, from new methods of taxation to new credit arrangements. Yet, while England and Japan learned from their successes and failures how to deploy the tools of modern public finance and equipped themselves to become world powers, China did not. He’s comparative historical analysis isolates the nature of the credit crisis confronting each state as the crucial factor in determining its specific trajectory. This perceptive and persuasive explanation for China’s failure at a critical moment in its history illuminates one of the most important but least understood transformations of the modern world.

In this book, John Roemer presents a unified and rigorous theory of political competition between parties. He models the theory under many specifications, including whether parties are policy oriented or oriented toward winning, whether they are certain or uncertain about voter preferences, and whether the policy space is uni- or multidimensional. He examines all eight possible combinations of these choice assumptions, and characterizes their equilibria.

He fleshes out a model in which each party is composed of three different factions concerned with winning, with policy, and with publicity. Parties compete with one another. When internal bargaining is combined with external competition, a natural equilibrium emerges, which Roemer calls party-unanimity Nash equilibrium.

Assuming only the distribution of voter preferences and the endowments of the population, he deduces the nature of the parties that will form. He then applies the theory to several empirical puzzles, including income distribution, patterns of electoral success, and why there is no labor party in the United States.

Scholars normally emphasize the contrast between the two great eighteenth-century thinkers Jean-Jacques Rousseau and Adam Smith. Rousseau is seen as a critic of modernity, Smith as an apologist. Istvan Hont, however, finds significant commonalities in their work, arguing that both were theorists of commercial society and from surprisingly similar perspectives.

In making his case, Hont begins with the concept of commercial society and explains why that concept has much in common with what the German philosopher Immanuel Kant called unsocial sociability. This is why many earlier scholars used to refer to an Adam Smith Problem and, in a somewhat different way, to a Jean-Jacques Rousseau Problem. The two problems—and the questions about the relationship between individualism and altruism that they raised—were, in fact, more similar than has usually been thought because both arose from the more fundamental problems generated by thinking about morality and politics in a commercial society. Commerce entails reciprocity, but a commercial society also entails involuntary social interdependence, relentless economic competition, and intermittent interstate rivalry. This was the world to which Rousseau and Smith belonged, and Politics in Commercial Society is an account of how they thought about it.

Building his argument on the similarity between Smith’s and Rousseau’s theoretical concerns, Hont shows the relevance of commercial society to modern politics—the politics of the nation-state, global commerce, international competition, social inequality, and democratic accountability.

Displaced by the growth of cities and left impoverished by the inequities of an archaic land tenure system, peasants throughout Latin America are entering politics and upsetting the balance between social forces that had once been the sole competitors for governmental power. Still the largest occupational grouping in most countries, these peasants provide an important base of potential support for governments willing to undertake rural reform. In the light of this, Robert Kaufman's case study of Chilean land reform warrants careful consideration.

Focusing on the efforts of successive Chilean governments to pass and implement land reform legislation, Kaufman explores the way in which relatively high levels of social modernization and political institutionalization affect the emergence of the land reform issue, the timing and nature of the involvement of conflicting social groups, and the building of coalitions in support of various types of change.

The prudent administrator clearly recognizes the differences between authority and power. The first is the right to wield power and the second is the actual exercise of power. Joseph B. Eastman, as federal coordinator of transportation, had the authority to require acts of railroad coordination but lacked the power. When he tried to exercise authority as though it were power, the railroads combined with the unions and deprived him of his authority.

Earl Latham, in this analysis of the politics of administration, makes use of hitherto unpublished letters and memoranda written by Eastman. Coming at a time when the railroad industry is suffering acutely from its chronic problem of excessive separatism, The Politics of Railroad Coordination is a thought-provoking application of power group analysis to a major problem of administration. It will be of particular interest to persons concerned with problems of the regulation of industry, public administration, the transportation industry, and the method of power group analysis.

What is it about free-market ideas that give them tenacious staying power in the face of such manifest failures as persistent unemployment, widening inequality, and the severe financial crises that have stressed Western economies over the past forty years? Fred Block and Margaret Somers extend the work of the great political economist Karl Polanyi to explain why these ideas have revived from disrepute in the wake of the Great Depression and World War II, to become the dominant economic ideology of our time.

Polanyi contends that the free market championed by market liberals never actually existed. While markets are essential to enable individual choice, they cannot be self-regulating because they require ongoing state action. Furthermore, they cannot by themselves provide such necessities of social existence as education, health care, social and personal security, and the right to earn a livelihood. When these public goods are subjected to market principles, social life is threatened and major crises ensue.

Despite these theoretical flaws, market principles are powerfully seductive because they promise to diminish the role of politics in civic and social life. Because politics entails coercion and unsatisfying compromises among groups with deep conflicts, the wish to narrow its scope is understandable. But like Marx's theory that communism will lead to a "withering away of the State," the ideology that free markets can replace government is just as utopian and dangerous.

A provocative history of the changing values that have given rise to our present discontents.

We pursue power, pleasure, and profit. We want as much as we can get, and we deploy instrumental reasoning—cost-benefit analysis—to get it. We judge ourselves and others by how well we succeed. It is a way of life and thought that seems natural, inevitable, and inescapable. As David Wootton shows, it is anything but. In Power, Pleasure, and Profit, he traces an intellectual and cultural revolution that replaced the older systems of Aristotelian ethics and Christian morality with the iron cage of instrumental reasoning that now gives shape and purpose to our lives.

Wootton guides us through four centuries of Western thought—from Machiavelli to Madison—to show how new ideas about politics, ethics, and economics stepped into a gap opened up by religious conflict and the Scientific Revolution. As ideas about godliness and Aristotelian virtue faded, theories about the rational pursuit of power, pleasure, and profit moved to the fore in the work of writers both obscure and as famous as Hobbes, Locke, and Adam Smith. The new instrumental reasoning cut through old codes of status and rank, enabling the emergence of movements for liberty and equality. But it also helped to create a world in which virtue, honor, shame, and guilt count for almost nothing, and what matters is success.

Is our world better for the rise of instrumental reasoning? To answer that question, Wootton writes, we must first recognize that we live in its grip.

Why and how systems of political financing and representation in Europe and North America give outsized influence to the wealthy and undermine democracy, and what we can do about it.

One person, one vote. In theory, everyone in a democracy has equal power to decide elections. But it’s hardly news that, in reality, political outcomes are heavily determined by the logic of one dollar, one vote. We take the political power of money for granted. But does it have to be this way? In The Price of Democracy, Julia Cagé combines economic and historical analysis with political theory to show how profoundly our systems in North America and Europe, from think tanks and the media to election campaigns, are shaped by money. She proposes fundamental reforms to bring democracy back into line with its egalitarian promise.

Cagé shows how different countries have tried to develop legislation to curb the power of private money and to develop public systems to fund campaigns and parties. But these attempts have been incoherent and unsystematic. She demonstrates that it is possible to learn from these experiments in the United States, Europe, and elsewhere to design a better system that would increase political participation and trust. This would involve setting a strict cap on private donations and creating a public voucher system to give each voter an equal amount to spend in support of political parties. More radically, Cagé argues that a significant fraction of seats in parliamentary assemblies should be set aside for representatives from disadvantaged socioeconomic groups.

At a time of widespread political disenchantment, The Price of Democracy is a bracing reminder of the problems we face and an inspirational guide to the potential for reform.

Like other dangerous but pleasurable activities, such as downhill skiing and mountain climbing, engaging in unprotected sex implicitly involves the weighing of costs and benefits. Recognizing that the transmission of the AIDS virus is a consequence of private choices—rational and often informed—to engage in risky conduct, the authors employ tools of economic analysis to reassess the orthodox approach to AIDS by the public health community.

Standard predictions of the spread of AIDS, the authors argue, are questionable because they ignore rational behavioral response to the risk of infection. For the same reason, customary recommended public health measures, such as extensive testing for the AIDS virus, not only may be ineffective in controlling the spread of the disease but may actually cause it to spread more rapidly. The authors examine regulatory measures and proposals such as mandatory testing, criminal punishments, and immigration controls, as well as the subsidization of AIDS education and medical research, the social and fiscal costs of AIDS, the political economy of the government's response, and the interrelation of AIDS and fertility risk.

Neither liberal nor conservative, yet on the whole skeptical about governmental involvement in the epidemic, this book is certain to be controversial, but its injection of hard-headed economic thinking into the AIDS debate is long overdue. Although Private Choices and Public Health is accessible to the interested general reader, it will also capture the attention of economists—especially those involved in health issues—epidemiologists, public health workers, lawyers, and specialists in sexual behavior and drug addiction.

Preference falsification, according to the economist Timur Kuran, is the act of misrepresenting one's wants under perceived social pressures. It happens frequently in everyday life, such as when we tell the host of a dinner party that we are enjoying the food when we actually find it bland. In Private Truths, Public Lies Kuran argues convincingly that the phenomenon not only is ubiquitous but has huge social and political consequences. Drawing on diverse intellectual traditions, including those rooted in economics, psychology, sociology, and political science, Kuran provides a unified theory of how preference falsification shapes collective decisions, orients structural change, sustains social stability, distorts human knowledge, and conceals political possibilities.

A common effect of preference falsification is the preservation of widely disliked structures. Another is the conferment of an aura of stability on structures vulnerable to sudden collapse. When the support of a policy, tradition, or regime is largely contrived, a minor event may activate a bandwagon that generates massive yet unanticipated change.

In distorting public opinion, preference falsification also corrupts public discourse and, hence, human knowledge. So structures held in place by preference falsification may, if the condition lasts long enough, achieve increasingly genuine acceptance. The book demonstrates how human knowledge and social structures co-evolve in complex and imperfectly predictable ways, without any guarantee of social efficiency.

Private Truths, Public Lies uses its theoretical argument to illuminate an array of puzzling social phenomena. They include the unexpected fall of communism, the paucity, until recently, of open opposition to affirmative action in the United States, and the durability of the beliefs that have sustained India's caste system.

The question of the comparative efficiency of socialism, long debated in theoretical discussions, is explored in depth in these studies. Abram Bergson, one of the foremost Western scholars of the Soviet system, focuses especially on socialism as found in the USSR, and thus on the famous “Soviet model.” This includes centralist planning with its reliance on bureaucratic, as distinct from market processes, and a development strategy stressing growth and, until recently, limited economic relations with the capitalist West. Devoting some attention also to the experience with the “Soviet model” in Eastern Europe, Bergson compares the resulting economic performance with that in the West. The United States is the major Western country considered, but Western European nations are also studied with care and precision.

The “Soviet model” has been evolving in the course of time, and these studies explore recent developments in planning, particularly managerial incentives and controls, and growth strategy. In contrasting Eastern and Western economic performance, Bergson uses sophisticated quantitative techniques to contrast levels and growth of productivity while allowing for differences in historical factors, especially the stage of economic development. Productivity is considered both for the economy generally and for its sectors. Although socialist efficiency is investigated mainly through the Soviet case, this path-breaking book should serve as a point of departure for further inquiries into that large theme.

As the federal government’s programs have increased in complexity, with regard both to world and national affairs and to state and local interests, the problems of decision making have become vastly more intricate. This book is designed to help improve understanding of the principles of program budgeting in relation to the decisionmaking process in the federal government; to stimulate others to develop these ideas further; and to accelerate the application of program budgeting in governmental activities.

Divided into three sections, the book begins with a discussion of the government decisionmaking process, the role of budgeting, and efforts made in past years by the federal government to improve the planning–programming–budgeting process. The second section covers the introduction of program budgeting in the Department of Defense and possible application to other federal activities. The third section deals with the subject of implementation and operation of the program budget and discusses an operating federal program budget in terms of its usefulness to specific areas.

Albert O. Hirschman is renowned worldwide for theories that have been at the forefront of political economics during the last half century. In these twenty essays he casts his sharp analytical eye on his own ideas, questioning and qualifying some of his major propositions on social change and economic development. Hirschman's self-subversion, as well as the self-affirmation that is also present here, reveal the workings of a distinguished mind. They also bring us fresh perspective on the material in his twelve previous books and countless essays.In the substantial essays that open this collection, Hirschman reappraises points he made in such books as Exit, Voice, and Loyalty, The Strategy of Economic Development, and The Rhetoric of Reaction. Subsequent essays fruitfully reexplore the themes of Latin American development and market society that have occupied him throughout his career. Hirschman also forays into new puzzles, such as the likely impact, negative or otherwise, of the Eastern European revolutions of 1989 on the Third World, the on-and-off connections between political and economic progress, and the role of conflict in enhancing community spirit in a liberal democracy.

In a rare and particularly welcome section of the book, Hirschman presents autobiographical fragments that reflect his deep involvement in some of the important events of this century. He recollects his flight from Hitler's Germany in 1933, his studies in Paris, his work with the antifascist underground in Italy in 1937-38, and his role in helping Varian Fry in Marseilles, in 1940, to rescue political and intellectual refugees from Vichy France. Such accounts deepen our understanding of how Hirschman's penetrating insights took shape.

Public policy advocates routinely assert that “research has shown” a particular policy to be desirable. But how reliable is the analysis in the research they invoke? And how does that analysis affect the way policy is made, on issues ranging from vaccination to minimum wage to FDA drug approval? Charles Manski argues here that current policy is based on untrustworthy analysis. By failing to account for uncertainty in an unpredictable world, policy analysis misleads policy makers with expressions of certitude. Public Policy in an Uncertain World critiques the status quo and offers an innovation to improve how policy research is conducted and how policy makers use research.

Consumers of policy analysis, whether civil servants, journalists, or concerned citizens, need to understand research methodology well enough to properly assess reported findings. In the current model, policy researchers base their predictions on strong assumptions. But as Manski demonstrates, strong assumptions lead to less credible predictions than weaker ones. His alternative approach takes account of uncertainty and thereby moves policy analysis away from incredible certitude and toward honest portrayal of partial knowledge. Manski describes analysis of research on such topics as the effect of the death penalty on homicide, of unemployment insurance on job-seeking, and of preschooling on high school graduation. And he uses other real-world scenarios to illustrate the course he recommends, in which policy makers form reasonable decisions based on partial knowledge of outcomes, and journalists evaluate research claims more closely, with a skeptical eye toward expressions of certitude.