An Enabling Mechanism for the Creation, Adjustment, and Dissolution of States and Governmental Units

Kjell Hausken and John F. Knutsen ()

Public Economics from EconWPA

Abstract: The article proposes an enabling mechanism for the creation, adjustment and dissolution of governmental units, giving autonomy to each resident as in a direct democracy. Rather than focusing on a narrow model with restrictive and specialized assumptions, and subsequent solutions, as has been common in the literature, the article takes individuals seriously acknowledging that they are best equipped to find their own solutions. The emphasis is on the practical approach of how individuals discover and implement their subjective preferences and how this discovery and implementation process can be facilitated and corresponding costs lowered. Governmental units are subjected to some of the same market forces as ordinary firms, in the spirit of Coase (1988a). This brings the interaction between governmental units closer to a market structure, and serves to eliminate or reduce many of the coercive elements of government.

Keywords: Territorial units; individual liberty; individual decision making; individual welfare; competitive markets; public choice; governmental units; endogenous determination of borders; constitutional economics; political economy; government; constitution (search for similar items in EconPapers)
JEL-codes: D72 H4 H7 H77 H11 H89 (search for similar items in EconPapers)
Date: 2004-09-22
Note: Type of Document - pdf; pages: 31. 31 pages pdf file
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:0409011

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