From Wild West to the godfather: enforcement market structure

Weak states enable private enforcement but it does not always fade away in the presence of strong states. We develop a general equilibrium model of the market organization of enforcers (self-enforcers, competitive specialized enforcers or monopoly) who defend endowments from predators. We provide co...

Full description

Saved in:
Bibliographic Details
Main Author: Anderson, James E. 1943- (Author)
Format: Book
Language:English
Published: Cambridge, Mass. National Bureau of Economic Research 2001
Series:National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 8469
Subjects:
Links:http://papers.nber.org/papers/w8469.pdf
Summary:Weak states enable private enforcement but it does not always fade away in the presence of strong states. We develop a general equilibrium model of the market organization of enforcers (self-enforcers, competitive specialized enforcers or monopoly) who defend endowments from predators. We provide conditions under which a Mafia emerges, persists and is stable. Mafias are most likely to emerge at intermediate stages of economic development. Private enforcers might provide better enforcement to the rich than would a welfare-maximizing state - hence the State may find it difficult to replace the Mafia or competitive private enforcers.
Physical Description:37 S. graph. Darst.