Vlad Tarko

Interests

Research

varieties of capitalism, institutional economics, polycentric governance, constitutional political economy, public choice, economic disequilibrium, agent-based modelling

Teaching

microeconomics, economic development, institutional economics, comparative economic systems, public choice, entrepreneurship, history of economic thought

Courses

Scholarly Contributions

Books

• Aligica, P. D., Boettke, P. J., & Tarko, V. (2019). Public Governance and the Classical-Liberal Perspective: Political Economy Foundations. Oxford University Press.
• Tarko, V. (2017). Elinor Ostrom: An Intellectual Biography. Rowman \& Littlefield International.
• Tarko, V. (2016). Elinor Ostrom: An Intellectual Biography. Bloomsbury Publishing Plc.. doi:10.5040/9798881812829
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  Elinor Ostrom was the first woman to win the Nobel Prize in economics. She has been at the forefront of New Institutional Economics and Public Choice revolutions, discovering surprising ways in which communities around the world have succeed in solving difficult collective problems. She first rose to prominence by studying the police in metropolitan areas in the United States, and showing that, contrary to the prevailing view at the time, community policing and smaller departments worked better than centralized and large police departments. Together with her husband, Vincent, they have set up the Bloomington Workshop in Political Theory and Policy Analysis, which has grown into a global network of scholars and practitioners. Throughout her career, she was interested in studying ecological problems, and understanding how people manage communal properties. Her most famous discovery is that communities often find ingenious ways of escaping the “tragedy of the commons”. Analysing a wide-variety of successes and failures, and working together with many other scholars, she was able to uncover a series of institutional “design principles”: a set of criteria which, if followed, societies are more likely to be productive and resilient to shocks. Some of her most important theoretical insights, about polycentricity and institutional evolution, arose from this synthesizing effort. Furthermore, this led her to develop a framework for the study of the relationship between societies and their natural environment which brought institutional insights into the field of environmental studies.
• Aligica, P. D., & Tarko, V. (2014). Capitalist Alternatives: Models, Taxonomies, Scenarios. Routledge.

Chapters

• Tarko, V. (2020). Open-sourcing civil society. In Exploring the Social and Political Economy of Alexis de Tocqueville. Palgrave.
• McPhail, E., & Tarko, V. (2017). The Evolution of Governance Structures in a Polycentric System. In Handbook of Behavioral Economics and Smart Decision-Making: Rational Decision-Making within the Bounds of Reason(pp 290--313). Edward Elgar Publishing.

Journals/Publications

• Farrant, A., & Tarko, V. (2024). Who is to put the bell on the cat? Democracy, dictatorship, and James M. Buchanan's early 1980s involvement with Pinochet's Chile. Southern Economic Journal, 91(2). doi:10.1002/soej.12717
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  Although Milton Friedman's mid-1970s involvement with Pinochet's Chile has generated much controversy, the claim that James M. Buchanan was similarly eager to provide Pinochet's military dictatorship with early 1980s policy advice is increasingly reported as an established fact in the vast scholarly literature on neoliberalism. This article invokes a wealth of previously ignored primary source material that sheds significant new light on Buchanan's early 1980s involvement with Chile. In particular, we evaluate whether Buchanan's May 1980 visit to Chile was an integral part of the Pinochet junta's late 1970s and early 1980s efforts to draft a new constitution. Similarly, we evaluate whether Buchanan's ideas had any significant influence on the views of Pedro Ibáñez and Carlos Cáceres (the most anti-democratic members of Pinochet's Council of State and the primary hosts of Buchanan's May 1980 visit to Chile). Finally, we shed important new light on Buchanan's participation in the highly controversial late 1981 Mont Pèlerin Society meeting in Chile.
• Nechita, R., & Tarko, V. (2023). Classical Liberalism in Romania, Past and Present. Econ Journal Watch, 20(1).
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  From its beginnings in the 19th century to the present day, liberalism in Romania has been closely linked with efforts to integrate Romania within Western European culture and politics. The movement was originally oriented primarily against foreign dominating powers (the Ottoman Empire, Austro-Hungary, and Russia) and their local agents, rather than against the Romanian government as a vector of oppression. The main objective of the liberal movement has been to build and control a ‘national state’ that would then pursue modernization and institutional reform. After the fall of the communist regime, the classical-liberal tradition had to be rediscovered and even rebuilt.
• Tarko, V., & Safner, R. (2022). International regulatory diversity over 50 years: political entrepreneurship within fiscal constraints. Public Choice, 193(Issue 1-2). doi:10.1007/s11127-022-01011-2
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  Over the last 50 years, economic freedom in modern capitalist democracies has increased although the regulatory state has expanded considerably, resulting in the paradox of “freer markets, more rules” (Vogel, 1996). We provide a hierarchical cluster analysis of the policy trajectories of OECD countries over the last 50 years, as well as a theoretical framework that builds on Stigler’s (1971) theory of economic regulation. Our findings suggest that these developments are not the result of ideological narratives such as “neoliberalism,” but instead we confirm some claims from the “varieties of capitalism” and “regulatory capitalism” literatures using independent methods. Our approach is better able to explain the diversity of regulatory regimes across countries than existing approaches that focus on either national patterns or policy sectors, and we also provide a fuller account of government crowding-out and crowding-in effects across the entire structure of production.
• Moberg, L., & Tarko, V. (2021). Special economic zones and liberalization avalanches. Journal of Entrepreneurship and Public Policy, 10(Issue 1). doi:10.1108/jepp-01-2021-0008
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  Purpose: The purpose of this study is to show under what conditions a special economic zone will succeed at spurring development and at sparking broader liberalization. Design/methodology/approach: The authors use a combination of formal modeling and case studies. Findings: Most special economic zones fail because of rent-seeking. Successful zones create positive economic and political externalities to other regions. Credible reforms are associated with turning the opposition to the zones into supporters, as a consequence to the positive externalities. Originality/value: The authors add heterogeneity to the model of political elite dynamics, which leads to significant enhancements of the model and removes the pro-centralization bias of the Blanchard and Shleifer's (2001) model. They also criticize Weingast's federalism model as applied to China. Success of China is explained by a different mechanism, which we put forth in this paper.
• Tarko, V. (2021). Local Accountability and National Coordination in Fiscal Federalism, by Charles Hankla, Jorge Martinez-Vazquez, and Raul Alberto Ponce Rodriguez. Publius: The Journal of Federalism, 51(2), e16-e16. doi:10.1093/publius/pjaa041
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  How does the structure of political parties affect the efficiency of decentralization? This is the main question that Charles Hankla, Jorge Martinez-Vazquez, and Raul Alberto Ponce-Rodriguez have set to answer in their book. The authors make a strong case that the outcomes of decentralization, in terms of the capacity of a democratic system to provide local public goods, are partially contingent on whether parties are institutionalized and local politics is subordinated to national politics (i.e., parties are “integrated”). Decentralization has different important and interacting facets: administrative, fiscal, and electoral. The authors argue that party integration is an additional confounding element, which significantly affects the operation of the system by influencing the incentives of political actors at the local level. The key benefit of party integration is that it provides a mechanism for addressing inter-jurisdictional externalities. The book makes several important contributions. At the most general level, this book is a...
• Tarko, V. (2021). Scott scheall, F.A. Hayek and the epistemology of politics: the curious task of economics. New York, NY: Routledge, 2020. xiii + 200 Pages. USD 160.00 (hardback). Public Choice, 189(3-4), 607-612. doi:10.1007/s11127-021-00909-7
• Tarko, V. (2021). Self-governance, robust political economy, and the reform of public administration. Social Philosophy and Policy, 38(Issue 1). doi:10.1017/s0265052521000273
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  This essay explains how to use the calculus of consent framework to think more rigorously about self-governance, and applies this framework to the issue of evaluating federal regulatory agencies. Robust political economy is the idea that institutions should be designed to work well even under weak assumptions about decision-makers' knowledge and benevolence. I show how the calculus of consent can be used to analyze both incentives and knowledge problems. The calculus is simultaneously a theory of self-governance and a tool for robust political economy analysis. Applying this framework to the case of public administration leads to the conclusion that private goods (such as medicine) tend to be over-regulated, public goods tend to be under-regulated (such as enabling too much pollution), and regulatory agencies tend to be over-centralized (and should in most cases either be replaced with certification markets or moved to state level).
• Tarko, V. (2021). Simple Rules for a More Inclusive Economy. European Journal of Law and Economics.
• Tarko, V. (2020). Understanding post-communist transitions: the relevance of Austrian economics. The Review of Austrian Economics, 33(1), 163--186.
• Farrant, A., & Tarko, V. (2019). James M. Buchanan's 1981 visit to Chile: Knightian democrat or defender of the "Devil's fix"?. The Review of Austrian Economics, 32(1), 1--20.
• Salter, A. W., & Tarko, V. (2019). Governing the banking system: an assessment of resilience based on Elinor Ostrom's design principles. Journal of Institutional Economics, 15(3), 505--519.
• Tarko, V., & Farrant, A. (2019). The efficiency of regulatory arbitrage. Public Choice.
• Tarko, V., & Gangotena, S. (2019). FREEDOM OF ASSOCIATION AND ITS DISCONTENTS: THE CALCULUS OF CONSENT AND THE CIVIL RIGHTS MOVEMENT. Research in the History of Economic Thought and Methodology, 37B. doi:10.1108/s0743-41542019000037b021
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  Does the classical liberal emphasis on freedom of association provide an intel-lectual cover for bigotry? We formulate this question in economic terms using James Buchanan’s economic approach to ethics, according to which moral values can be understood as preferences about other people’s behaviors. We discuss two possible market failures associated with freedom of association: inter-group externalities and Schelling-type emergent segregation. We show that the classical liberal position about freedom of association, as elaborated in Buchanan and Tullock’s Calculus of Consent, is fully equipped to deal with the first one, but not with the second. The progressive view that some preferences are so offensive that they should be dismissed rather than engaged or negotiated with can be reframed as an attempt to solve the emergent segregation problem, but it is vulnerable to political economy problems of its own, in particular to an inherent tendency to over-expand the meaning of “bigotry.”
• Tarko, V., & Gangotena, S. J. (2019). Freedom of Association and Its Discontents: The Calculus of Consent and the Civil Rights Movement. Research in the History of Economic Thought and Methodology, 37B, 197--221.
• Tarko, V., & O’Donnell, K. (2019). Escape from Europe: a calculus of consent model of the origins of liberal institutions in the North American colonies. Constitutional Political Economy, 30(Issue 1). doi:10.1007/s10602-018-9264-3
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  The migration out of Europe and the establishment of North American colonies presents us with a great puzzle: why did the colonists establish democratic forms of governance? Considering that early democratic colonies appeared even before philosophical works such as those of Locke and Montesquieu were written, it is difficult to make the case that ideology was the driving factor. We show that the calculus of consent model proposed by Buchanan and Tullock (The calculus of consent, Liberty Fund, Indianapolis, 1962) offers a simple but subtle solution this puzzle. Because migrants formed much more homogeneous communities, and because, thanks to the large geographical expanse, the inter-jurisdictional externalities were small, the efficient level of consensus within each colony was much greater than in Europe, and the scope of efficient centralized decision-making was much smaller. Hence, a structure of decentralized democratic communities emerged as the efficient outcome.
• Ngo, C., & Tarko, V. (2018). Economic development in a rent-seeking society: socialism, state capitalism and crony capitalism in Vietnam. Canadian Journal of Development Studies / Revue canadienne d'études du développement, 39(4), 481--499.
• Tarko, V., & O'Donnell, K. (2018). Escape from Europe: a calculus of consent model of the origins of liberal institutions in the North American colonies. Constitutional Political Economy.
• Salter, A. W., & Tarko, V. (2017). Polycentric banking and macroeconomic stability. Business and Politics, 19(2), 365--395.
• Boettke, P. J., Tarko, V., & Aligica, P. D. (2016). Why Hayek Matters: The Epistemic Dimension of Comparative Institutional Analysis. Advances in Austrian Economics, 21, 163--185.
• Aligica, P. D., & Tarko, V. (2015). Crony Capitalism. CESifo DICE Report, 13(3), 27--32.
• Aligica, P., & Tarko, V. (2015). Polycentric Stakeholder Analysis: Corporate Governance and CSR under Value Heterogeneity. Academy of Management Proceedings, 2015(1), 17539.
• Tarko, V. (2015). Polycentric structure and informal norms: competition and coordination within the scientific community. Innovation: The European Journal of Social Science Research, 28(1), 63--80.
• Tarko, V. (2015). The challenge of empirically assessing the effects of constitutions. Journal of Economic Methodology, 22(1), 46--76.
• Tarko, V. (2015). The role of ideas in political economy. The Review of Austrian Economics, 28(1), 17--39.
• Aligica, P. D., & Tarko, V. (2014). Crony Capitalism: Rent Seeking, Institutions and Ideology. Kyklos, 67(2), 156--176.
• Aligica, P. D., & Tarko, V. (2014). Institutional Resilience and Economic Systems: Lessons from Elinor Ostrom’s Work. Comparative Economic Studies, 56(1), 52--76.
• Evans, A., & Tarko, V. (2014). Contemporary work in Austrian economics. Journal of Private Enterprise, 29(3).
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  This article provides a brief survey of contemporary developments in the Austrian School of economics, signalling that (1) the amount of Austrian research and the number of Austrian researchers are growing exponentially; (2) good Austrian economists are not being marginalized by the economics profession; and (3) there have been significant advances recently in our understanding of economics. Scholars can embrace the second revival of Austrian economics and look confidently at the increasing academic credibility of the school.
• Aligica, P. D., & Tarko, V. (2013). Co-Production, Polycentricity, and Value Heterogeneity: The Ostroms’ Public Choice Institutionalism Revisited. American Political Science Review, 107(04), 726--741.
• Tarko, V. (2013). Can probability theory deal with entrepreneurship?. The Review of Austrian Economics, 26(3), 329--345.
• Aligica, P. D., & Tarko, V. (2012). Polycentricity: From Polanyi to Ostrom, and Beyond. Governance, 25(2), 237--262.
• Aligica, P. D., & Tarko, V. (2012). State capitalism and the rent-seeking conjecture. Constitutional Political Economy, 23(4), 357--379.
• Aligica, P. D., & Tarko, V. (2011). Challenges to technological and economic foresight in the information society. International Journal of Foresight and Innovation Policy, 7(Issue 4). doi:10.1504/ijfip.2011.043018
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  What happens to our foresight prowess when foundational social changes take place? the paper outlines some basic parameters of the new realities brought about by the information society. thinking of social forecasting as entailing a combination of economic method with technological foresight, one is able to articulate a more nuanced approach and go beyond the clichés of the day. the paper explores a series of challenges to the practice of technological and economic foresight arguing that, in conjunction, these challenges invite a significant change of attitude in how we approach the practice of social prediction. © 2011 Inderscience Enterprises Ltd.
• Tarko, V., & Aligica, P. D. (2011). From “Broad Studies” to Internet-based “Expert Knowledge Aggregation”. Notes on the methodology and technology of knowledge integration. Futures, 43(9), 986--995.
• Tarko, V. (2007). An adaption of the Jaynes decision algorithm. Entropy, 9(Issue 1). doi:10.3390/e9010027
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  There are two types of decisions: given the estimated state of affairs, one decides to change oneself in a certain way (that is best suited for the given conditions); given what one is, one decides to change the state of affairs in a certain way (that is best suited for what one wants for oneself). Jaynes' approach to decision theory accounts only for the first type of decisions, the case when one is just an observer of the external world and the decision doesn't change the world. However, many decisions involve the wish to transform the external environment. To account for this we need to add an additional step in Jaynes' proposed algorithm. © 2007 by MDPI.