Thanks for this, Pithy. You're a good teacher.
A couple of questions, when you have a moment, - no rush:
1. Re "F.3 Common market" Is this clause supposed to read "... a common market that allows factory and product mobility?" Because if it is, then I get it, if not, I don't.
2. Re "F2. Subnational autonomy" v "F.5. Is the allocation of political authority institutionalized or within the sole control of one of the levels of government?"
First, is "institutionalized political authority" the same thing as "authority within the sole control of the levels of government?"
Second, I don't understand what the difference is between 'subnational autonomy' - and 'institutionalized authority' that is also 'within the sole control of one of the 'subnational governments.'
BTW, 'Ahhnold' had hard budget constraints - he just didn't know it. He knows it now. California is broke.
Uh, that second question of mine should read "Is 'institutionalized political authority' the same as 'authority within the sole control of one of the levels of government?'
I'm not sure if there are really 5 different factors, either. We'll have to take it up with Professor Weingast.
On "factor mobility", that's economic jargon. The "factors of production" are labour and capital. So it means both that people can cross provincial/state borders to get jobs and investors can invest in other provinces/states.
American states don't quite have a "hard" budge constraint, because state taxes are deducted from federal taxes, and there are lots of transfers. Governor Schwartznegger would like to make it even softer by having the federal government guarantee California's debts. If it doesn't, then it seems California can't borrow from anyone other than the mob.
Thanks, Pithy.
(California is full of people who like to dance on the edge of the cliff - Arnie can borrow from Mel Gibson.)
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