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Efficient anarchy

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  • Peter Leeson

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Abstract

Can anarchy be efficient? This paper argues that for reasons of efficiency, rational, wealth-maximizing agents may actually choose statelessness over government in some cases. Where markets are sufficiently thin or where government is prohibitively costly, anarchy is the efficient mode of social organization. If total social wealth under conditions of relatively lower levels of trade is not substantially smaller than it is under conditions of relatively higher levels of trade, the cost of government may exceed the social benefits it provides. Likewise, if the cost of a state is sufficiently large, even substantial differences in social wealth under these two scenarios may prove too small to justify the formation of government from a cost-benefit perspective. The framework I provide explains the persistence of anarchy in two major areas where we tend to observe it: among primitive societies and at the global level. (JEL P48) Copyright Springer Science+Business Media B.V. 2007

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 130 (2007)
Issue (Month): 1 (January)
Pages: 41-53

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Handle: RePEc:kap:pubcho:v:130:y:2007:i:1:p:41-53

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Web page: http://www.springerlink.com/link.asp?id=100332

Related research

Keywords: Anarchy; Social efficiency; Institutions; Nuer; International trade;

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References

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Citations

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Cited by:
  1. Edward Stringham, 2014. "Extending the Analysis of Spontaneous Market Order to Governance," Atlantic Economic Journal, International Atlantic Economic Society, vol. 42(2), pages 171-180, June.
  2. Benjamin Powell & Edward Stringham, 2009. "Public choice and the economic analysis of anarchy: a survey," Public Choice, Springer, vol. 140(3), pages 503-538, September.
  3. Boettke, Peter, 2011. "An Anarchist's reflection on the political economy of everyday life," MPRA Paper 32374, University Library of Munich, Germany.
  4. Alexander Fink, 2011. "Under what conditions may social contracts arise? Evidence from the Hanseatic League," Constitutional Political Economy, Springer, vol. 22(2), pages 173-190, June.
  5. Mark Koyama, 2012. "Prosecution Associations in Industrial Revolution England: Private Providers of Public Goods?," The Journal of Legal Studies, University of Chicago Press, vol. 41(1), pages 95 - 130.
  6. Shruti Rajagopalan & Virgil Storr, 2012. "The rationality of taking to the hills," The Review of Austrian Economics, Springer, vol. 25(1), pages 53-62, March.
  7. Leeson, Peter T., 2010. "Rational choice, Round Robin, and rebellion: An institutional solution to the problems of revolution," Journal of Economic Behavior & Organization, Elsevier, vol. 73(3), pages 297-307, March.
  8. Claudia Williamson, 2009. "Informal institutions rule: institutional arrangements and economic performance," Public Choice, Springer, vol. 139(3), pages 371-387, June.
  9. Peter Leeson, 2007. "Edward P. Stringham, ed., Anarchy and the Law: The Political Economy of Choice," Public Choice, Springer, vol. 133(1), pages 253-256, October.
  10. Libman, Alexander Mikhailovich, 2009. "Эндогенные Границы И Распределение Власти В Федерациях И Международных Сообществах
    [ENDOGENOUS BOUNDARIES AND DISTRIBUTION O
    ," MPRA Paper 16473, University Library of Munich, Germany.
  11. Matthew Baker & Erwin Bulte, 2010. "Kings and Vikings: on the dynamics of competitive agglomeration," Economics of Governance, Springer, vol. 11(3), pages 207-227, June.
  12. Williamson, Claudia R., 2012. "Dignity and development," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(6), pages 763-771.
  13. Tomáš Otáhal, 2009. "The Agency Problem in New Institutional Economics," Politická ekonomie, University of Economics, Prague, vol. 2009(5), pages 677-695.
  14. Edward Stringham, 2014. "Gary Chartier, Anarchy and Legal Order: Law and politics for a stateless society," Public Choice, Springer, vol. 159(3), pages 581-583, June.
  15. Edward Stringham & Todd Zywicki, 2011. "Rivalry and superior dispatch: an analysis of competing courts in medieval and early modern England," Public Choice, Springer, vol. 147(3), pages 497-524, June.
  16. Baker, Matthew & Bulte, Erwin & Weisdorf, Jacob, 2010. "The origins of governments: from anarchy to hierarchy," Journal of Institutional Economics, Cambridge University Press, vol. 6(02), pages 215-242, June.
  17. Claudia Williamson & Rachel Mathers, 2011. "Economic freedom, culture, and growth," Public Choice, Springer, vol. 148(3), pages 313-335, September.
  18. Art Carden & Christopher Coyne, 2013. "The political economy of the Reconstruction Era’s race riots," Public Choice, Springer, vol. 157(1), pages 57-71, October.
  19. Benjamin Powell & Edward Stringham, 2012. "Radical scholarship taking on the mainstream: Murray Rothbard’s contribution," The Review of Austrian Economics, Springer, vol. 25(4), pages 315-327, December.

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