The Market for Protection and the Origin of the State

Kai Konrad and Stergios Skaperdas

No 2173, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We examine a stark setting in which security or protection can be provided by self-governing groups of by for-profit entrepreneurs: kings, lords, or mafia dons. Though self-governance is best for the population, it faces problems of long-term viability. Typically, in providing security the stable 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 or lower than in the absence of a state.

Keywords: Governance; Origin of State; Protection; Security (search for similar items in EconPapers)
JEL-codes: D30 D70 H10 (search for similar items in EconPapers)
Date: 1999-06
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Citations: View citations in EconPapers (21)

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Related works:
Journal Article: The market for protection and the origin of the state (2012)
Working Paper: The market for protection and the origin of the state (2012)
Working Paper: The Market for Protection and the Origin of the State (2005)
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