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Title:The market for protection and the origin of the state PDF Logo
Authors:Konrad, Kai A.
Skaperdas, Stergios
Issue Date:2005
Series/Report no.:CESifo working papers 1578
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 selfgovernance 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.
Subjects:property rights
anarchy
government
JEL:H10
D70
D30
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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