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Anarchy, Monopoly, and Predation

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  • Peter T. Leeson

Abstract

Although institutions rooted in the folk theorem can support self-enforcing exchange in a wide variety of contexts, their potential to create cooperation is not limitless. In particular, the folk theorem may break down when some agents are physically stronger than others. I demonstrate this in the context of Stringham's [2006] vertically integrated proprietary communities. In this system a monopoly proprietor maximizes profits by optimally extorting his tenants in violation of voluntary contracts. The result is a predatory rather than voluntary regime.

Suggested Citation

  • Peter T. Leeson, 2007. "Anarchy, Monopoly, and Predation," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(3), pages 467-482, September.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200709)163:3_467:amap_2.0.tx_2-w
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    13. Peter Leeson, 2007. "Efficient anarchy," Public Choice, Springer, vol. 130(1), pages 41-53, January.
    14. Leeson, Peter T., 2005. "Self-enforcing arrangements in African political economy," Journal of Economic Behavior & Organization, Elsevier, vol. 57(2), pages 241-244, June.
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    Cited by:

    1. 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.
    2. Stringham, Edward Peter, 2015. "Private Governance: Creating Order in Economic and Social Life," OUP Catalogue, Oxford University Press, number 9780199365166.
    3. Ilia Murtazashvili & Jennifer Murtazashvili, 2015. "Anarchy, self-governance, and legal titling," Public Choice, Springer, vol. 162(3), pages 287-305, March.
    4. Francesco Angelini & Guido Candela & Massimiliano Castellani, 2020. "Governance efficiency with and without government," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 54(1), pages 183-200, January.
    5. Koyama, Mark & Arteaga, Fernando & Desierto, Desiree, 2020. "Shipwrecked by Rents," CEPR Discussion Papers 15300, C.E.P.R. Discussion Papers.
    6. Yasir Khan & Attiya Yasmin Javid, 2015. "The Impact of Formal and Informal Institutions on Economic Performance: A Cross-Country Analysis," PIDE-Working Papers 2015:130, Pakistan Institute of Development Economics.
    7. Alexander W. Salter & Abigail R. Hall, 2015. "Calculating Bandits: Quasi-Corporate Governance and Institutional Selection in Autocracies," Advances in Austrian Economics, in: New Thinking in Austrian Political Economy, volume 19, pages 193-213, Emerald Group Publishing Limited.
    8. Peter J. Boettke & Rosolino A. Candela, 2020. "Productive specialization, peaceful cooperation and the problem of the predatory state: lessons from comparative historical political economy," Public Choice, Springer, vol. 182(3), pages 331-352, March.
    9. Harris,Colin & Cai,Meina & Murtazashvili,Ilia & Murtazashvili,Jennifer Brick, 2020. "The Origins and Consequences of Property Rights," Cambridge Books, Cambridge University Press, number 9781108969055, October.
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    11. Leeson Peter T. & Williamson Claudia R., 2009. "Anarchy and Development: An Application of the Theory of Second Best," The Law and Development Review, De Gruyter, vol. 2(1), pages 77-96, July.
    12. Murtazashvili, Ilia & Murtazashvili, Jennifer, 2016. "The origins of private property rights: states or customary organizations?," Journal of Institutional Economics, Cambridge University Press, vol. 12(1), pages 105-128, March.
    13. Libman, Alexander Mikhailovich, 2009. "Эндогенные Границы И Распределение Власти В Федерациях И Международных Сообществах [ENDOGENOUS BOUNDARIES AND DISTRIBUTION OF POWER In the Federation]," MPRA Paper 16473, University Library of Munich, Germany.
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    15. Alexander William Salter, 2016. "Political Property Rights and Governance Outcomes: A Theory of the Corporate Polity," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 31(Winter 20), pages 1-20.
    16. Gregory W. Caskey & Ilia Murtazashvili, 2022. "The predatory state and coercive assimilation: The case of the Uyghurs in Xinjiang," Public Choice, Springer, vol. 191(1), pages 217-235, April.
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    19. Salter, Alexander William, 2015. "Rights to the Realm: Reconsidering Western Political Development," American Political Science Review, Cambridge University Press, vol. 109(4), pages 725-734, November.

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    More about this item

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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