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CPE Final Exam Terms Questions and Answers (Rated 100%)
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CPE Final Exam Terms Questions and Answers (Rated 100%)
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1|Page | © copyright 2024/2025 | Grade A+CPE Final Exam Terms Questions
and Answers (Rated 100%)
Tiebout Model
✓ • A theory where you have a lot of local governments providing the
public goods and services
✓ • The local governments best know their constituents and they can
provide them with the things they want
✓ • By allowing the local governments to compete with each other,
citizens will live under the government that gives them what they want
(since all individuals are different and have personal evaluations) and
the governments will provide good things for their citizens because
they don't want them to leave
✓ • This is a nonpolitical solution to the free-rider problem in local
governance
✓ • Citizens shape the government
Curley Effect
Master01 | October, 2024/2025 | Latest update
, 1|Page | © copyright 2024/2025 | Grade A+
✓ • When a politician uses wealth reducing policies to drive out those
who do not support him
✓ • This politician is tipping the balance of votes in his direction through
implementing policies that strangle economic growth
✓ • Government shapes the citizens
✓ • Example:
✓ o "Let's say a mayor advocates and adopts policies that redistribute
wealth from the prosperous to the not so prosperous by bestowing
generous tax-financed favors on unions, the public sector in general,
and select corporations. These beneficiaries become economically
dependent on their political patrons, so they give them their undivided
electoral support—e.g., votes, campaign contributions, and get-out-
the-vote drives. Meanwhile, the anti-rich rhetoric of these clever
demagogues, combined with higher taxes to fund the political favors,
triggers a flight of tax refugees from the cities to the suburbs. This
reduces the number of political opponents on the city's voter
registration rolls, thereby consolidating an electoral majority for the
anti-wealth party. It also shrinks the tax base of the city, even as the
city's budget swells."
Protective, Productive, and Predatory State
Master01 | October, 2024/2025 | Latest update
, 1|Page | © copyright 2024/2025 | Grade A+
✓ • We want protective and productive with having a predatory state
✓ • Protective: A protective government carries out the tasks assigned to
it by the established constitution and doesn't make any "choices"
✓ • Productive: that agency through which individuals provide
themselves with "public goods" in post-constitutional contract
✓ • Predatory: in this position, each person has some incentive to initiate
conflict, to engage in predatory activity
Constitutional Rules Impacted by play at Post Constitutional Level
✓ • The purpose of constitutional economics is to legitimize the existence
of a constitutionally circumscribed state and to discuss what type of
constitutional rules could reasonably reach unanimous consent at the
state of constitutional choice. Rational contractors will unanimously
agree to less than unanimity rules, which reduce decision-making costs
with respect to routine collective decisions.
✓ • Post constitutional analysis involves the examination of strategies
players adopt within defined constitutional rules and principles. During
the post constitutional stage players treat the rules of the game as
constraints and devise strategies to deal with them.
Politics without Romance
Master01 | October, 2024/2025 | Latest update
, 1|Page | © copyright 2024/2025 | Grade A+
✓ • James Buchanan
✓ • Public choice theory is the avenue through which romance notions
of the workings of the government has been replaced with more
realistic notions
✓ • Public choice theory models the realities rather than the romance of
political institutions
✓ • "Public choice theory has been the avenue through which a
romantic and illusory set of notions about the workings of governments
and the behavior of persons who govern has been replaced by a set
of notions that embody more skepticism about what governments can
do and what governors will do, notions that are surely more consistent
with the political reality that we may all observe about us."
Emperor's Singing Contest
Master01 | October, 2024/2025 | Latest update
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