The Role of the State in Society from an Institutional Perspective

Juan Avello and Sebatián Muena
Exploring Economics, 2021

Niveau: avancé

Perspectives:	Économie institutionnelle, Économie néoclassique, Autre
Sujet:	Institutions, gouvernements & politiques
Format:	Description du cours/syllabus

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The Role of the State in Society from an Institutional Perspective

This syllabus was originally taught at Universidad de Chile

Fall Term 2020
Instructor: Alyssa Schneebaum
Juan Avello and Sebatián Muena
Instructors email address: smuena@fen.uchile.cl ; juanchi.avello@gmail.com

Course Summary

The course seeks to analyze the conformation of the modern State, its historical evolution, analysis perspectives, some efficiency dilemmas in State intervention in the market, private solutions to public problems and phenomena of participation and manifestation of popular will.

This course aims to carry out an analysis of the role of the State in society, from an institutional perspective. By exploring the States conformation, its history, the discussion around its role and efficiency and the popular will participation. The course employs a 60% theoretical and 40% practical methodology, privileging tools of participation and group deliberation so that students not only learn but also understand, question and internalize these contradictions and the different perspectives and visions of authors regarding the subject.

The structure is suited for the students to understand critically and apply the concepts described by the authors to the problems surrounding the State institution, consisting in one presentation session, four concept lecture and discussion sessions, a practical constitutional convention simulation session and the handing of an essay. The learning aim is for students to internalize and manage the general concepts and problematics related to the State, the social rights, the popular will, the property right, and the market and to be able to use them in the analysis of their social environment.

Building Block 8: Theories of Economics

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Course Overview

Session 1: Is the State necessary?

We start the first session describing the course, its teaching and evaluating methodologies, and its mandatory bibliography and supplementary texts. Then, there is a space for both the teacher and the students to introduce themselves. The latter ones will also talk briefly about the questions: ¿Is the state necessary? And ¿why? After everybody has shared their thoughts, the class will create a word cloud (with Menti or another app) suggesting the three most relevant concepts mentioned by its classmates. The results will be then discussed until the session is over, in order to have a general diagnostic of the expectations and interests that students may have, which will orientate the following sessions.

Larraín, G. (2019), The Constitution of Economic System (mimeo). Chapter 2. This book is in the process of being published.
Atria, Fernando; Larrain, Guillermo; Benavente, José Miguel; Couso, Javier y Alfredo Joignant (2013), The Other Model. From the neoliberal order to the public regime, Editorial Debate (Tercera Parte) 125-157.

Session 2: Role of the State and the social contract.

This session objective is to analyse the historical progress, until the present day, the State’s role and the social contract’s role (focussing on the undermining of the social contract) expressed in the Constitution. This aims to position the main ideas that led to the establishment of a republican state with its distinctive features in the western world. Also, we will analyse some distinct notions about the role that the State should take in society, its relative size and power to interfere in different markets, looking as well to the utilitarianism and contractualism perspectives in those issues.

Glaeser, Edward, L. and Andrei Shleifer (2003). "The rise of the regulatory state". Economic Literature Magazine, 41 (2).
Chibbek, Vivek. (2005). “Reviving the Developmental State? The Myth of the “National Bourgeoisie“”. Socialist Register 2005: The Empire Reloaded. Vol. 41.

Session 3: Property rights discussion.

This session is composed of two parts: The first one’s objective is to provide definitions, explore challenges and recognize problems surrounding the property rights (studying its current critics) and the economic nature of the goods (defining a criterion of categorization and addressing its specificities). The last part aims to come to an understanding of some types of goods, analysing them from the perspective of the property right of the person that produces it.

Atria, Fernando; Larrain, Guillermo; Benavente, José Miguel; Couso, Javier y Alfredo Joignant (2013), The Other Model. From the neoliberal order to the public regime, Editorial Debate (Tercera Parte) 158-170.

Session 4: Social rights discussion.

The fourth session aims to talk about social rights, focussing on its production, use, enjoyment and gain, by analysing cases, discussing issues related to those social rights and, specially, tackling contemporary problems: (1) Own definition of social rights. (2) Struggle between surplus and social rights. (3) Private or State providing of social rights. Y (4) analysing and discussing cases.

Atkinson, Anthony B, (2001), The Economic Consequences of Rolling Back the Welfare State, Munich Lectures in Economics, MIT Press (chap. 1.2)
Tirole, Jean (2016), Economics for the Common Good, Princeton University Press (ch. 2, The moral limits of markets).

Session 5: The case of Chile.

This session aims to study the specific case of Chile, a country disrupted by the social riots and the pandemic, which finds itself in historical voting to decide if the national constitution will be changed by elected constitutional representatives. We will analyse the national context, the events occurred since 2019, and the main challenges that Chilean society needs to tackle. Finally, we will discuss the main motives of the social outbreak and propose and contrast some possible solutions to the social issues that caused it.

Larraín, G. (2019), La estabilidad del contrato social. Caps. 6 y 7.

Session 6: Constitutional conventions simulation.

The constitutional convention simulation will have students tackle three fundamental subjects: Government regime (presidential, parliamentary or mixed); Regional autonomy (centralized versus decentralized government); And civic methods of participation. In this instance, students will have a case with given information from which they will have to reach an agreement (or otherwise vote) to settle about the constitutional convention text (using an adaptation of the rules of an actual constitutional convention, this means that if ten people constitute the convention only seven are needed to agree to approve the document). Moderators will circulate between the discussion groups watching over the correct development of the exercise.

Session 7: Final essay.

The final essay is where the students use the analytical and theoretical tools learned throughout the sessions to explore and comprehend a subject of their interest to propose a solution to an issue of institutional nature. The main point of this assignment is for students to be able to extrapolate the knowledge and questionings gathered in this course applying them in a case of their own communities and doing the theoretical exercise of proposing, arguing and defending an idea that aims to give a solution to that institutional issue. This essay will have evaluation guidelines and a guiding brief to orientate the expected results. Finally, a course summary will be written, containing its application and main challenges, as a formal product of these sessions.

Further suggested readings

De Grauwe, Paul (2017), The limits of the market. The pendulum between government and the market, Oxford University Press (ch. 3: External limits of capitalism, ch. 4: Internal limits of capitalism, ch. 7: External limits of governments and ch. 8: Internal limits of governments)
Glaeser, Edward (1998), "Non-profit entrepreneurs", Journal of Public Economics, 81, 2001.
Gopel, Maja (2016), “The Great Mindshift - How a New Economic Paradigm and Sustainability Transformations go Hand in Hand”, The Anthropocene: Politik—Economics—Society—Science, Volume 2, 2016.
Harmon, Derek (2018), “When the Fed Speaks: Arguments, Emotions, and the Microfoundations of Institutions”, Administrative Science Quarterly, 1–34.
Hogdson, Geoffrey (2004), “Reclaiming habit for institutional economics”, Journal of Economic Psychology 25, 2004.
Koning, Eduard (2016), “The three institutionalisms and institutional dynamics: understanding endogenous and exogenous change”, Journal of Public Policy (2016), 36:4, 639–664
Posner, Eric and Weyl, Glen (2018). “Radical Markets: Uprooting Capitalism and Democracy for a Just Society”. Princeton University Press.
Suckert, Lisa (2017), “Unravelling ambivalence: A field-theoretical approach to moralised markets”, Current Sociology 1–22
Vanberg, Viktor (2005), “Market and State: The perspective of Constitutional Political Economy”, Journal of Institutional Economics, No. 04/10.

Assignments and Assessment

The final grade is composed of four different evaluations; one of class participation, another is the result of a quiz, the third is related to the discussion in a constitutional convention simulation and the last one considers a final individual essay.

In the quiz, students are expected to think about the sessions, its concepts, and problematizations. The items of the quiz will ask open questions concerning the previous sessions and what the authors propose in their texts to give the students a time to reflect on what they have learned.