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An Enabling Mechanism for the Creation, Adjustment, and Dissolution of States and Governmental Units

Author

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  • Kjell Hausken

    (University of Stavanger)

  • John F. Knutsen

    (Knutsen & Didriksen as)

Abstract

The article proposes an enabling mechanism for the creation, adjustment and dissolution of governmental units, giving autonomy to each resident as in a direct democracy. Rather than focusing on a narrow model with restrictive and specialized assumptions, and subsequent solutions, as has been common in the literature, the article takes individuals seriously acknowledging that they are best equipped to find their own solutions. The emphasis is on the practical approach of how individuals discover and implement their subjective preferences and how this discovery and implementation process can be facilitated and corresponding costs lowered. Governmental units are subjected to some of the same market forces as ordinary firms, in the spirit of Coase (1988a). This brings the interaction between governmental units closer to a market structure, and serves to eliminate or reduce many of the coercive elements of government.

Suggested Citation

  • Kjell Hausken & John F. Knutsen, 2004. "An Enabling Mechanism for the Creation, Adjustment, and Dissolution of States and Governmental Units," Public Economics 0409011, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0409011
    Note: Type of Document - pdf; pages: 31. 31 pages pdf file
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    References listed on IDEAS

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    Cited by:

    1. Kjell Hausken, 2016. "Gordon Tullock: A Nobel Prize left unbestowed," Journal of Bioeconomics, Springer, vol. 18(2), pages 121-127, July.

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    More about this item

    Keywords

    Territorial units; individual liberty; individual decision making; individual welfare; competitive markets; public choice; governmental units; endogenous determination of borders; constitutional economics; political economy; government; constitution;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H4 - Public Economics - - Publicly Provided Goods
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H89 - Public Economics - - Miscellaneous Issues - - - Other

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