Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/46500
Authors: 
Skaperdas, Stergios
Year of Publication: 
2011
Series/Report no.: 
CESifo working paper: Public Choice 3495
Abstract: 
Proprietary rule, whereby the state is owned by a ruler who maximizes tax revenues minus the costs of governing, is a useful ideal type that describes many of the states that have ever existed. The study of proprietary rule and its public finance, however, is comparatively scarce. I argue that proprietary rule emerges out of anarchy and its main alternative - selfgovernance - has difficulties surviving because of problems in providing effective internal and external security. Competitive proprietary rule (or, organized anarchy) is the market structure for the provision of security that is more stable, but is highly inefficient because all the savings that come out of the public provision of security are dissipated into contests for power among proprietary rulers. I also explore how competitive proprietary rule can be consolidated into more complex forms of governance.
JEL: 
H59
N47
Document Type: 
Working Paper

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