The market for protection and the origin of the state

Konrad, Kai A. und Skaperdas, Stergios (1. Oktober 2005): The market for protection and the origin of the state. CESifo Working Papers

Abstract

We examine a stark setting in which security or protection can be provided by self-governing groups or by for-profit entrepreneurs (kings, kleptocrats, or mafia dons). Though self-governance is best for the population, it faces problems of long-term viability. Typically, in providing security the equilibrium market structure involves competing lords, a condition that leads to a tragedy of coercion: all the savings from the provision of collective protection are dissipated and welfare can be as low as, or even lower than, in the absence of the state

• Dokumententyp: Paper
• Keywords: property rights; anarchy; government
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > MPI für Steuerrecht und Öffentliche Finanzen
• Themengebiete: 300 Sozialwissenschaften > 320 Politik ; 300 Sozialwissenschaften > 330 Wirtschaft
• JEL Classification: D30, D70, H10
• ISSN: 0938-2259
• Ort: München
• Sprache: Englisch