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The Market for Protection and the Origin of the State Author info | Abstract | Publisher info | Download info | Related research | Statistics Kai A. Konrad ()
Stergios Skaperdas ()
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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 self-governance 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.
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Paper provided by CESifo GmbH in its series CESifo Working Paper Series with number
CESifo Working Paper No. 1578.
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Date of creation: 2005Date of revision:
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Keywords: property rights anarchy government Other versions of this item:
Find related papers by JEL classification: D30 - Microeconomics - - Distribution - - - General D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General H10 - Public Economics - - Structure and Scope of Government - - - General
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