ABSTRACT
An interesting debate has emerged on the role of the constitution—the very foundation of the rule of law—in the process of economic transition. Much of the work on the role of the constitution in the economy comes out of the literature often referred to as positive political economy. One important focus of this literature has been the problem of time-inconsistency in the politics of economic policy-making. Economic reform is also beset by time-inconsistency problems. The implementation of reform requires individuals to make short-term sacrifices in consumption for the promise of future gains. The recognition of the time-inconsistency problem in economic reform has focused attention on the role of the constitution in the reform process. At the Seventh Congress of People’s Deputies in December 1992, opponents of economic reform blocked Yeltsin’s attempts to extend his control over ministerial appointments and threatened to withhold approval for an extension of the president’s decree-making powers.
