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.

Anarchy, groups, and conflict: an experiment on the emergence of protective associations

“…While this argument has been criticized (see Landes and Posner 1979;Cowen 1992;and Sutter 1995), several arguments have been made in defense of protective associations as a viable alternative to the public provision of law enforcement (Friedman 1973(Friedman , 1994Caplan and Stringham 2001). See Powell and Stringham (2009) for an in-depth description of this ongoing debate. 7 Research on protective associations relates more broadly to the literature examining how and to what extent selfenforcing exchange can achieve social cooperation.…”

Self-enforcing norms and efficient non-cooperative collective action in the provision of public goods

“…It is impossible to survey this literature here. A recent survey that focuses on the role of public choice theory on understanding the economics of anarchy is by Powell and Stringham (2009), showing that there are multiple reasons why a stateless economy may, but need not perform reasonably well, and identify forces that may stabilize its status or transform it into different forms of governance. Skaperdas (1992), Hirshleifer (1988Hirshleifer ( , 1995 and Grossman (1994) analyzed economic behavior in the absence of property rights, where players choose between production of consumable output and appropriation effort, which may consist of stealing, arming or guarding, implying considerable inefficiency.…”

“…6 See, for instance, Garfinkel and Skaperdas (2007) for an overview. types of theories in this context: social contract theories that build on the consensus of players and explore the role of a commitment technology 7 and predatory theories in which a player with considerable enforcement power implements cooperation. 8 The comprehensive survey by Powell and Stringham (2009) emphasizes that in many of these theories repeated interaction is a key aspect that stabilizes a cooperative or conflictless outcome. Our approach shows that internally peaceful and fully efficient group behavior can be the equilibrium outcome of a fully non-cooperative non-repeated game.…”

Identity, Authority and Evolution of Order: The Trajectory of Dueling Simulated

“…Duel of honor should be distinguished from both the judicial duel (trial by combat) 3 and dueling for chivalry 1 For a detailed discussion of 'orderly anarchy', see Powell and Stringham (2009). 2 Two treaties about the code of dueling were published in the 1590s (Stone, 1965, 245).…”