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Appropriation, violent enforcement and transaction costs : a critical survey

  • Mehrdad Vahabi

    ()

    (ERASME - Equipe de recherche et d'analyse des sociétés Maghreb-Europe - Université Paris VIII - Vincennes Saint-Denis : EA3389)

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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Paper provided by HAL in its series Post-Print with number hal-00629109.

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Date of creation: 2011
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Publication status: Published, Public Choice, 2011, 147, 1, 227-253
Handle: RePEc:hal:journl:hal-00629109
Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00629109
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