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Appropriation, violent enforcement, and transaction costs: a critical survey

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  • Mehrdad Vahabi

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Abstract

In this paper, I focus on the extension of transaction costs to appropriative activity and coercive power in the property rights approach. It has been argued that including the costs of appropriation and violent enforcement in transaction costs is based on the assumption that Coaseian bargaining can be extended to any institutional scenario, i.e., voluntary as well as coercive exchange. However, voluntary transactions cannot capture the logic of coercive power. This means that the assumption of an efficient political market is not valid, and that the "Political Coase Theorem" (PCT) lacks the logical consistency to provide a cornerstone for political theory.

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 147 (2011)
Issue (Month): 1 (April)
Pages: 227-253

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Handle: RePEc:kap:pubcho:v:147:y:2011:i:1:p:227-253

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

Related research

Keywords: Appropriation; Hobbesian state; Political Coase theorem; Property rights approach; Transaction costs; Violent enforcement; D74; H11; H41; N40;

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Cited by:
  1. Luljeta Hajderllari & Kostas Karantininis & Lartey G. Lawson, 2012. "FDI as an Export-Platform: A Gravity Model for the Danish Agri-Food Industry," IFRO Working Paper 2012/7, University of Copenhagen, Department of Food and Resource Economics.
  2. Vahabi, Mehrdad, 2011. "Soft budget constraint and the parastatal sector," MPRA Paper 37926, University Library of Munich, Germany.

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