Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/19042 
Year of Publication: 
2005
Series/Report no.: 
CESifo Working Paper No. 1578
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
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
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