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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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Suggested Citation

  • Mehrdad Vahabi, 2011. "Appropriation, violent enforcement, and transaction costs: a critical survey," Public Choice, Springer, vol. 147(1), pages 227-253, April.
  • Handle: RePEc:kap:pubcho:v:147:y:2011:i:1:p:227-253
    DOI: 10.1007/s11127-010-9721-7
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    Citations

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    Cited by:

    1. Mehrdad Vahabi, 2011. "The Economics of Destructive Power," Chapters,in: Handbook on the Economics of Conflict, chapter 5 Edward Elgar Publishing.
    2. repec:cai:repdal:redp_273_0307 is not listed on IDEAS
    3. MacKenzie, Ian A. & Ohndorf, Markus, 2013. "Restricted Coasean bargaining," Journal of Public Economics, Elsevier, vol. 97(C), pages 296-307.
    4. Mehrdad Vahabi, 2017. "Coercive state, resisting society, political and economic development in Iran," CEPN Working Papers 2017-17, Centre d'Economie de l'Université de Paris Nord.
    5. Mehrdad Vahabi, 2016. "A positive theory of the predatory state," Public Choice, Springer, vol. 168(3), pages 153-175, September.
    6. Pietri, Antoine, 2015. "« Propriété » ou « possession » : une question de sémantique…ou de paradigme ?
      [“Property” or “possession”: just a matter of semantics…or paradigm?]
      ," MPRA Paper 67096, University Library of Munich, Germany.
    7. 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.
    8. Vahabi, Mehrdad, 2011. "Soft budget constraint and the parastatal sector," MPRA Paper 37926, University Library of Munich, Germany.
    9. Francesco Angelini & Guido Candela & Massimiliano Castellani, 2018. "Governance and efficiency with and without Government," Working Paper series 18-18, Rimini Centre for Economic Analysis.
    10. repec:kap:pubcho:v:175:y:2018:i:3:d:10.1007_s11127-018-0533-5 is not listed on IDEAS

    More about this item

    Keywords

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

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative

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