Comments and Discussion

Steven N. Durlauf:

This ambitious and provocative paper addresses one of the great questions of twentieth-century social science, namely, Why has the convergence toward a common liberal democratic form of government in America and Europe failed to lead to convergence in social welfare policies? Alberto Alesina, Edward Glaeser, and Bruce Sacerdote have each made important individual contributions to understanding how social and political factors interact with economic outcomes, and the current paper constitutes an exciting collaboration.

There is much to admire in this paper, both in terms of the particular arguments it develops and in terms of the sort of new research in political economy of which it is an example. Serious efforts to understand American exceptionalism date back at least as far as de Tocqueville. And as the authors point out, the causes of the political failure of socialism in the United States have been debated since the beginning of the twentieth century. At a methodological level, what the authors show is that one can conceptualize differences in redistribution through standard economic reasoning, by which I mean they show how recent models such as that offered by Roland Benabou and Efe Ok can be synthesized to produce a positive, formal model of redistribution. This model illustrates how differences in the level of redistribution between societies can be explained by differences in altruism (defined as the utility that one agent derives from the private consumption utility of others), differences in the political power of the less affluent, and differences in the volatility of income, which will induce differing degrees of redistribution as a form of income smoothing. The authors then argue, using both historical examples and statistical analyses, that the differences between American and European redistribution policies can be attributed to the first two factors. Hence the paper shows both how the tools of economic analysis can be used to elucidate a question that has traditionally fallen under the purview of political science and sociology, and at the same time how substantive ideas from these fields can be incorporated into and enrich conventional economic explanations.

At a broad level, I think the authors are clearly correct in concluding that differing views about the poor and about poverty lie at the heart of American-European differences in social welfare policies. In this respect the paper reflects what I think it is fair to call a basic trend in comparative economic studies, namely, a resurgence of social or cultural explanations for cross-country differences.

That said, I believe there are some problems with both the paper's evidence and its interpretations. These problems do not so much mean that the paper is wrong, of course, but they do cause me to conclude that much remains to be done before one can draw firm conclusions on these questions.

To start with the evidence, the paper brings to bear a vast amount of historical information and statistical analysis to support its many claims. Both types of evidence seem problematic. With respect to history, the paper frequently makes grand assertions concerning American exceptionalism. Yet these claims are typically made without any evidence that the facts underlying them actually matter, and in some cases they show an insensitivity to the state of current historiography.

As an example of this tendency toward breathless assertion, the authors support their argument that American political institutions have a role in explaining U.S.-European differences with the claim that ". . . the United States is still governed by an eighteenth-century constitution designed to protect property." This and other remarks about the U.S. Constitution are, of course, essentially restatements of Charles Beard's famous claims about the economic origins of the Constitution, which have been subjected to powerful criticism for over half a century. My own reading of the historiographical literature is that Beard's thesis is at best extremely controversial and, at worst, regarded as largely refuted. In a recent poll,¹ a majority of historians rejected the Beard thesis, as did a substantial minority (30 percent) of economic historians, so it seems clear that one needs to be circumspect in using the thesis...