A Constitution for Knaves Crowds out Civic Virtues

Abstract

When discussing constitutional design, economists concentrate on the propensity of
\nindividuals to free ride. Preventing opportunistic behaviour by knaves has costs by crowding
\nout civic virtue. Another view emphasises active citizen participation in order to bolster civic
\nvirtue. A viable constitution must therefore be strict enough to deter exploitative behaviour. At
\nthe same time, the constitution should fundamentally convey trust towards its citizens and
\npoliticians. Distrusting public laws risk destroying the positive attitude of citizens and
\npoliticians towards the state. Civic virtue can be maintained and fostered by direct citizen
\nparticipation via popular referenda and initiatives.