Law Commons^™

Politics, Institutions, And Outcomes: Electricity Regulation In Argentina And Chile, William B. Heller, Mathew D. Mccubbins

Faculty Scholarship

Risk, whether market or political, is an important determinant of private investment decisions. One important risk, subject to control by the government, is the risk associated with the hold-up problem: governments can force utilities to shoulder burdensome taxes, to use input factors ineffectively, or to charge unprofitable rates for their service. To attract private investment governments must be able to make commitments to policies that are nonexpropriative (either to contracts that guarantee very high rates of return or to favorable regulatory policies). These commitments, of course, must be credible.

Judgments about the credibility of commitments to regulatory policies are based …

Rationality And The Foundations Of Positive Political Theory, Mathew D. Mccubbins, Michael F. Thies

Faculty Scholarship

In this paper, we discuss and debunk the four most common critiques of the rational choice research program (which we prefer to call Positive Political Theory) by explaining and advocating its foundations: the rationality assumption, component analysis (abstraction), strategic behavior, and theory building, in turn. We argue that the rationality assumption and component analysis, properly understood, can be seen to underlie all social science, despite the protestations of critics. We then discuss the two ways that PPT most clearly contributes to political science (i.e., what distinguishes it from other research programs), namely the introduction of strategic behavior (people do not …