The market for protection and the origin of the state

Kai Konrad and Stergios Skaperdas

Munich Reprints in Economics from University of Munich, Department of Economics

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 selfgovernance 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.

Keywords: property rights; anarchy; government (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (38)

Published in Economic Theory 2 50(2012): pp. 417-443

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https://epub.ub.uni-muenchen.de/13961/1/SSRN-id852524.pdf (application/pdf)

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 (2005)
Working Paper: The Market for Protection and the Origin of the State (1999)
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