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

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Author Info
Kjell Hausken (University of Stavanger)
John F. Knutsen (Knutsen & Didriksen as)

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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.

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File URL: http://129.3.20.41/eps/pe/papers/0409/0409011.pdf
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Publisher Info
Paper provided by EconWPA in its series Public Economics with number 0409011.

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Length: 31 pages
Date of creation: 22 Sep 2004
Date of revision:
Handle: RePEc:wpa:wuwppe:0409011

Note: Type of Document - pdf; pages: 31. 31 pages pdf file
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Web page: http://129.3.20.41

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Related research
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;

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Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, 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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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  2. Bolton, Patrick & Roland, Gerard, 1997. "The Breakup of Nations: A Political Economy Analysis," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1057-90, November.
    Other versions:
  3. Salop, Steven C & Scheffman, David T, 1983. "Raising Rivals' Costs," American Economic Review, American Economic Association, vol. 73(2), pages 267-71, May. [Downloadable!] (restricted)
  4. Kjell Hausken, 2005. "Production and Conflict Models Versus Rent-Seeking Models," Public Choice, Springer, vol. 123(1), pages 59-93, April. [Downloadable!] (restricted)
  5. Kjell Hausken & John F. Knutsen, 2002. "The Birth, Adjustment and Death of States," Public Economics 0205004, EconWPA. [Downloadable!]
  6. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-88, December. [Downloadable!] (restricted)
  7. Caplan, Bryan, 2001. " Standing Tiebout on His Head: Tax Capitalization and the Monopoly Power of Local Governments," Public Choice, Springer, vol. 108(1-2), pages 101-22, July. [Downloadable!] (restricted)
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    Other versions:
  11. Bolton, Patrick & Roland, Gerard & Spolaore, Enrico, 1996. "Economic theories of the break-up and integration of nations," European Economic Review, Elsevier, vol. 40(3-5), pages 697-705, April. [Downloadable!] (restricted)
  12. Buchanan, James M & Faith, Roger L, 1987. "Secession and the Limits of Taxation: Toward a Theory of Internal Exit," American Economic Review, American Economic Association, vol. 77(5), pages 1023-31, December. [Downloadable!] (restricted)
  13. Alesina, Alberto & Spolaore, Enrico, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1027-56, November.
    Other versions:
  14. Wellisch, Dietmar, 1994. "Interregional spillovers in the presence of perfect and imperfect household mobility," Journal of Public Economics, Elsevier, vol. 55(2), pages 167-184, October. [Downloadable!] (restricted)
  15. Posner, Richard A, 1975. "The Social Costs of Monopoly and Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 807-27, August. [Downloadable!] (restricted)
  16. Friedman, David, 1977. "A Theory of the Size and Shape of Nations," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 59-77, February. [Downloadable!] (restricted)
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  18. Casella, Alessandra, 2001. "The Role of Market Size in the Formation of Jurisdictions," Review of Economic Studies, Blackwell Publishing, vol. 68(1), pages 83-108, January.
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  19. Hausken, Kjell, 2000. "Migration and intergroup conflict," Economics Letters, Elsevier, vol. 69(3), pages 327-331, December. [Downloadable!] (restricted)
  20. Bordignon, Massimo & Brusco, Sandro, 2001. "Optimal secession rules," European Economic Review, Elsevier, vol. 45(10), pages 1811-1834, December. [Downloadable!] (restricted)
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  21. Stergios Skaperdas & Constantinos Syropoulos, 2001. "Guns, Butter, and Openness: On the Relationship between Security and Trade," American Economic Review, American Economic Association, vol. 91(2), pages 353-357, May. [Downloadable!] (restricted)
    Other versions:
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