42 Pages Posted: 11 Oct 2010 Last revised: 27 Jul 2013
Date Written: July 20, 2013
This paper studies an anarchic society with a production technology where the allocation of goods is governed by strength. I establish the following results. First, the anarchic society is inefficient as no widespread adoption of the production technology occurs. Second, wide-scale production, and thus efficiency, is generally not achievable through a punishment mechanism that requires punishers to be stronger than the to be punished. Third, efficiency can be enforced on the other hand through a religious system with a supernatural punishment mechanism if it is sufficiently credible. This paper makes a new point regarding the crucial role that religious institutions with a doctrine of salvation and damnation could play in the transition from anarchic societies to those with enforceable property rights that enable production and subsequent economic development.
Keywords: Property Rights, Anarchy, Supernatural Punishment, Religion, Religious Beliefs, Institutions, Neolithic Revolution, Partition Function Form Games, Dynamci Equilibrium
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