The State’s Enforcement Monopoly and the Private Protection of Property
Kristoffel R. Grechenig
Max-Planck-Institute for Research on Collective Goods
University of St. Gallen - Institute of Economy and the Environment (IWOe-HSG); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
October 1, 2011
MPI Collective Goods Preprint, No. 2011/24
The modern state has monopolized the legitimate use of force. This concept is twofold. First, the state is empowered with enforcement rights; second, the rights of the individuals are (partly) restricted. In a simple model of property rights with appropriation and defense activity, we show that a restriction of private enforcement is beneficial for the property owner, even if there are no economies of scale from public protection. We emphasize the role of the state as a commitment device for a certain level of enforcement. However, commitment will only work if the state can regulate private protection. A ban of private enforcement measures can even be beneficial in situations where there would be no private enforcement at first place because the 'shadow' of defense has a negative impact on the investments in property rights infringements. From a legal perspective, our approach emphasizes a regulation of victim behavior as opposed to the standard approach which focuses on the regulation of criminal behavior.
Number of Pages in PDF File: 28
Keywords: contests, property rights, enforcement, private protection, law
JEL Classification: K42, P14, P37, P48, N40working papers series
Date posted: October 20, 2011
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