The Economics of Constitution-Making

Abstract

Despite a reputation as the only provincial premier who speaks neither of the official languages of Canada, William Bennett, in the interview quoted above, provides a succinct rationale for the of constitution-making, a theme for this article, and an accurate paraphrase of the history of Canadian constitutional affairs over the last twelve decades. Although there have been occasional court cases and preemptive intrusions, the dramatic realignment of responsibilities across the three levels of government since 1867 has been accomplished mainly by intergovernmental negotiation. As Alan Cairns has argued, [m]uch of the change which has occurred has not been formally designated as constitutional, and it has not been accompanied by fanfare. It has simply represented the handiwork of busy men attempting to work an on-going system of government.2 Humble tools sometimes accomplish great things, however, and the metamorphosis of Canada's Constitution has been remarkable.3 Since, in large part, economics is the study of exchange, the negotiation of constitutional accommodations seems a natural subject for analysis. The purpose of this article is to see what light an may throw on the process by which constitutions are made and remade. The term constitution is used here to mean the rules, written and unwritten, that govern the division of responsibilities among the different levels of government in a federal state,4 while economic analysis refers to an approach based on the assumption that people's main motivation, at least in their public relations, is to maximize their utility.5 The actors whose utility maximization is examined in this article are politicians,