Public choice and the economic analysis of anarchy: a survey

Abstract

Must the state handle the adjudication of disputes? Researchers of different perspectives, from heterodox scholars of law who advocate legal pluralism to libertarian economists who advocate privatizing law, have increasingly questioned the idea that the state is, or should be, the only source of law. Both groups point out that government law has problems and that non-state alternatives exist. This article discusses some problems with the public judicial system and several for-profit alternatives. Public courts lack both incentives to be customer oriented and pricing mechanisms, plus they face problems associated with the bureaucratic provision of services. When parties can choose their tribunals, in contrast, those tribunals must serve customers and be mindful about conserving resources. Competition between arbitrators also can allow for experimentation and the provision of customized services rather than a centrally planned, one size fits all system. Contracts with an arbitration clause can easily stipulate the choice of tribunal, and we argue that if government courts simply refused to overrule binding arbitration agreements, de facto privatization could easily take place. This article discusses how private adjudication of disputes could enable the market to internalize externalities and provide services that customers desire.

Embracing morals in economics: The role of internal moral constraints in a market economy

“…22 Other studies such as Bernstein (1992) show how cooperation in tightly knit religious communities is prevalent. Powell and Stringham (2009) review many studies documenting people who seem to get along independent of formal rules, but judging to what extent cooperation is motivated by pure self-interest versus moral concerns is often difficult in historical case studies.…”

Exit, collective action and polycentric political systems

“…2 General payoffs for a one-shot 2 × 3 state-of-nature-with-exit game 4 Robert Axelrod has singled out the research on exit as one of the most important advances in the study of cooperation in recent decades (Axelrod 2000). Some of the points also connect more generally to discussions of the PD as a model of anarchic interactions; cf., e.g., Taylor 1987;Powell and Stringham 2009. least one player. This is so, because if one player expects that the other player will Cooperate, the best option is to Defect, but since the game is symmetrical each player reasons similarly, and then both will want to Defect-in which case their best option is to Exit, and the Nash equilibrium is mutual exit (cf.…”

Rivalry and superior dispatch: an analysis of competing courts in medieval and early modern England

“…Leeson (2009) examines a fascinating non-governmental legal system along the English and Scottish border up through the sixteenth century that was used to mitigate disputes. For an overview of the literature on public choice and stateless societies; see Boettke (2005), Stringham (2005), and Powell and Stringham (2009). utility enhancing for all parties 6 (Benson 1995(Benson , 1989(Benson , 1999(Benson , 1998Shavell 1995). In parts of the English history, we discuss the selection of courts was analogous in many ways.…”