Constitutional economics is a research program in economics and constitutionalism that has been described as extending beyond the definition of “the economic analysis of constitutional law” in explaining the choice “of alternative sets of legal-institutional-constitutional rules that constrain the choices and activities of economic and political agents.” This is distinct from explaining the choices of economic and political agents within those rules, a subject of “orthodox” economics. Constitutional economics studies the “compatibility of effective economic decisions with the existing constitutional framework and the limitations or the favorable conditions created by that framework.” It has been characterized as a practical approach to apply of the tools of economics to constitutional matters.  For example, a major concern of every nation is the proper allocation of available national economic and financial resources. The legal solution to this problem falls within the scope of constitutional economics.
Constitutional economics takes into account the significant impacts of political economic decisions as opposed to limiting analysis to economic relationships as functions of the dynamics of distribution of “marketable” goods and services. “The political economist who seeks to offer normative advice, must, of necessity, concentrate on the process or structure within which political decisions are observed to be made. Existing constitutions, or structures or rules, are the subject of critical scrutiny.”