Guns, Lawyers, and Money: Economic Consequences of Costly Conflict
نویسنده
چکیده
Conict and appropriation are costly activities that are economically signi cant, yet the assumption of perfect and costless enforcement of property rights in much of economic research has limited their systematic study. Conict follows directly from the methodological principle of self-interest and taking it into account in modeling leads to very di¤erent ndings than in its absence: in straightforward extensions of basic models of exchange, compensation is inversely related to marginal productivity; prices depend on relative power, as well as on preferences and endowments; exchange itself can be foreclosed by enforcement costs; the costs of security critically depend on governance and norms of behavior; wage subsidies, land reform and other seemingly ine¢ cient arrangements can be rationalized as appropriate policies in second-best settings; and comparative advantage is distorted in the presence of conict. Overall, in the presence of conict and appropriation Nirvana or rst-best models are not empirically plausible. Aspects of modern governance like checks and balances and the bureaucratic form of organization can partly be thought of as restraining conict and appropriation. These restraints are better than the typical governance alternative, which is personalized, proprietary governance and typically involves autocratic, amateurish, and corrupt rule.
منابع مشابه
Lawyers, guns, and money: a plenary presentation from the conference "Using Law, Policy, and Research to Improve the Public's Health".
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