WHAT IS ROBUST POLITICAL ECONOMY?
RPE is a framework of analysis inspired by the broad research program of “mainline” economics (Boettke 2012). It has been used to make a specific defense of classical liberal approaches to public policy (Pennington 2011). The core presumption of RPE is that, in order to be commendable, institutions aiming at human welfare should be robust to realistic challenges that are significant features of human political and social life.
Proponents characterize robustness as institutions capable of dealing with “hard” cases rather than merely “easy” cases in public policy (Boettke and Leeson 2004, 100). This means evaluating institutions on the basis of a range of possible conditions rather than the ideal conditions to which they are perfectly suited. They impute the two core realistic problems facing a political community to be those of knowledge and incentives (Pennington 2011; Leeson and Subrick 2006). Thus, robust institutions are those able to induce successful social cooperation even when participants lack important relevant information and have divergent individual interests of their own. In this sense, robustness is a “stress test” for institutions and theories. By focusing on these problems, RPE avoids political romanticism (Buchanan 1999, 45; Levy 2002) and utilizes instead the “worst-case scenario” theorizing that is embedded in much traditional liberal political thought (Farrant and Crampton 2008).
Communities have ameliorated these challenges through the use of social institutions—that is, formal and informal rules and norms that guide individual conduct (Pennington 2011, 192). For proponents of robustness, these institutions are primarily private property and voluntary exchange within a framework of the rule of law. Such a regime establishes domains of exclusive, but alienable, control over resources. This allows individuals to engage in productive activity and exchange on the presumption that they will not be interfering with the similar activity of others in different domains and are, at the same time, themselves protected from predation and interference. This facilitates individually beneficial activity and social cooperation, generates and shares dispersed knowledge, and aligns individual incentives with activity that subjectively benefits all participants.