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The Market for Protection and the Origin of the State

Author

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  • Kai A. Konrad
  • Stergios Skaperdas

Abstract

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.

Suggested Citation

  • Kai A. Konrad & Stergios Skaperdas, 2005. "The Market for Protection and the Origin of the State," CESifo Working Paper Series 1578, CESifo.
  • Handle: RePEc:ces:ceswps:_1578
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp1578.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Stergios Skaperdas, 2008. "An economic approach to analyzing civil wars," Economics of Governance, Springer, vol. 9(1), pages 25-44, January.
    2. Martin Mcguire, 2002. "Property distribution and configurations of sovereign states: A rational economic model," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(4), pages 251-270.
    3. Iyigun, Murat, 2006. "Ottoman Conquests and European Ecclesiastical Pluralism," IZA Discussion Papers 1973, Institute of Labor Economics (IZA).
    4. Gustavo Federico Torrens, 2008. "The economic value of ideology," CEMA Working Papers: Serie Documentos de Trabajo. 378, Universidad del CEMA.
    5. Grossman, Herschel I., 2002. ""Make us a king": anarchy, predation, and the state," European Journal of Political Economy, Elsevier, vol. 18(1), pages 31-46, March.
    6. Verdier, Thierry, 2010. "Ouverture, conflits et capacité étatique : une perspective d’économie politique," L'Actualité Economique, Société Canadienne de Science Economique, vol. 86(4), pages 415-449, décembre.
    7. Milante, Gary, 2007. "A kleptocrat's survival guide : autocratic longevity in the face of civil conflict," Policy Research Working Paper Series 4186, The World Bank.
    8. Alberto Chong & Mark Gradstein, 2008. "¿A quién le hacen falta líderes autoritarios?," Research Department Publications 4564, Inter-American Development Bank, Research Department.
    9. Alberto Chong & Mark Gradstein, 2008. "Who Needs Strong Leaders?," Research Department Publications 4563, Inter-American Development Bank, Research Department.
    10. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 2, chapter 22, pages 649-709, Elsevier.
    11. Iyigun, Murat, 2008. "Lessons from the Ottoman Harem (On Ethnicity, Religion and War)," IZA Discussion Papers 3556, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    property rights; anarchy; government;

    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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