The Growth of Competitive Governments

Albert Breton

Canadian Journal of Economics, 1989, vol. 22, issue 4, 717-50

Abstract: Consumers are indifferent about the provenance of the goods and services they consume. Given their information, income, and preferences, they choose from the lowest price source--with price defined to include transaction and deadweight costs. There are many supply sources: families, charitable and humanitarian organizations, cooperatives, business enterprises, and governments. These compete with each other. Competitive success is determined by comparative advantage, which in turn depends not only on differential economies of scale and other "standard" factors, but also on the differential capacity to control free riding and to reduce the deadweight burdens of the sums that have to be levied to pay for the goods and services demanded.

Date: 1989
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