When Roving Bandits Settle Down: Club Theory and the Emergence of Government

Abstract

How do a government arise from anarchy? In a classic article, Mancur Olson (1993) theorized that it could occur when a roving bandit decides to settle down. This stationary bandit comes to recognize an encompassing interest in its territory, improving its lot by providing governing and committing to stable rates of theft (taxation). The bandits highlighted by Olson (1993) are not individuals but rather groups organized to act collectively. I provide a club- theoretic (Buchanan 1965) analysis of bandits. I characterize the (actual or threats of) violence as a club good, i.e., one that is non-rival but from which out-group members can be excluded. I elaborate on the changes in the club’s group interest and in-group that will likely accompany the roving-to-stationary transition. To illustrate the salient points of the analysis, I provide a case study of the Visigoths: their emergence as a roving confederacy in the late fourth century, their migration and subsequent settlement, and the establishment of the Visigothic Kingdom.

Keywords: Club Theory, Government Formation, Collective Action, Roving and Stationary Bandits, Visigoths, Roman Empire

JEL Classification: D72, N43, N93, P16