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The institutional determinants of self-governance: a comment on Edward Stringham’s Private Governance

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  • Bruce Benson

    (Florida State University)

Abstract

Many pages would be require to discuss Private Governance’s important contributions, so I focus on a relatively minor flaw: chapter 9 on moral beliefs is inconsistent with Stringham’s general treatment of private governance institutions as endogenous. Moral beliefs are essentially depicted as unchanging, but they actually are endogenous too. Individuals can pursue wealth through cooperative interaction, which requires trust, creating incentives to develop beliefs that encourage ethical and benevolent behavior. Alternatively wealth can be taken from others through force and/or guile. Beliefs to facilitate involuntary transfers also are institutionalized. For instance, in order to benefit from coercive wealth transfers “in good conscience,” recipients have incentives to see their victims as enemies to justify a moral “right” to transfers. Changing moral beliefs is costly, however, so they tend to be fixed in the short term. Once it becomes apparent that existing beliefs significantly conflict with an individual’s interests, she is forced to question those beliefs. The impetus for rationalizing new beliefs arises. The direction of evolution can be predicted with a rational decision-making model. To illustrate the endogeneity of moral beliefs, three institutional settings are examined: “dignity culture,” “honor culture,” and “victimhood culture”.

Suggested Citation

  • Bruce Benson, 2018. "The institutional determinants of self-governance: a comment on Edward Stringham’s Private Governance," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 31(2), pages 209-230, June.
    • Handle: RePEc:kap:revaec:v:31:y:2018:i:2:d:10.1007_s11138-017-0382-3
    DOI: 10.1007/s11138-017-0382-3
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    References listed on IDEAS

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    1. Randall G. Holcombe, 1994. "The Economic Foundations of Government," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-13230-0, November.
    2. Kau, James B & Rubin, Paul H, 1979. "Self-Interest, Ideology, and Logrolling in Congressional Voting," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 365-384, October.
    3. Cooter, Robert, 1998. "Expressive Law and Economics," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 585-608, June.
    4. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-739, September.
    5. Joshua Hall (ed.), 2017. "Explorations in Public Sector Economics," Springer Books, Springer, number 978-3-319-47828-9, December.
    6. Benson, Bruce L, 1999. "An Economic Theory of the Evolution of Governance and the Emergence of the State," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 12(2), pages 131-160, November.
    7. Stringham, Edward Peter, 2015. "Private Governance: Creating Order in Economic and Social Life," OUP Catalogue, Oxford University Press, number 9780199365166.
    8. Vanberg, Viktor J. & Congleton, Roger D., 1992. "Rationality, Morality, and Exit," American Political Science Review, Cambridge University Press, vol. 86(2), pages 418-431, June.
    9. Benson, Bruce L, 1995. "An Exploration of the Impact of Modern Arbitration Statutes on the Development of Arbitration in the United States," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(2), pages 479-501, October.
    10. Cheung, Steven N S, 1974. "A Theory of Price Control," Journal of Law and Economics, University of Chicago Press, vol. 17(1), pages 53-71, April.
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    12. Bailey, Martin J, 1992. "Approximate Optimality of Aboriginal Property Rights," Journal of Law and Economics, University of Chicago Press, vol. 35(1), pages 183-198, April.
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    14. Bruce Benson, 1994. "Emerging from the Hobbesian jungle: Might takes and makes rights," Constitutional Political Economy, Springer, vol. 5(2), pages 129-158, March.
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    16. Rider, Robert, 1993. "War, Pillage, and Markets," Public Choice, Springer, vol. 75(2), pages 149-156, February.
    17. Nee, Victor, 1998. "Norms and Networks in Economic and Organizational Performance," American Economic Review, American Economic Association, vol. 88(2), pages 85-89, May.
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    19. von Mises, Ludwig, 1957. "Theory and History," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 1, number mises1957.
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    Cited by:

    1. 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.

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    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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