An Enabling Mechanism for the Creation, Adjustment, and Dissolution of States and Governmental Units

40 Pages Posted: 2 Feb 2011  

Kjell Hausken

Stavanger University College

John F. Knutsen

Knutsen & Didriksen as

Multiple version iconThere are 2 versions of this paper

Date Written: 2010

Abstract

The article proposes an enabling mechanism for the creation, adjustment and dissolution of governmental units, giving autonomy to each individual as in a direct democracy. The mechanism is designed such that Pareto optimality is possible, in contrast to earlier models which make various assumptions such as majority voting. Individuals are taken seriously acknowledging that they are best equipped to find their own solutions. The emphasis is on the practical approach of how individuals discover and implement their subjective preferences and how this discovery and implementation process can be facilitated and corresponding costs lowered. Governmental units are subjected to some of the same market forces as business firms. This brings the interaction between governmental units closer to a market structure, and serves to eliminate or reduce many of the coercive elements of government.

Keywords: Territorial units, individual liberty, individual decision making, individual wel-fare, competitive markets, public choice, governmental units, endogenous determination of borders, constitutional economics, political economy

JEL Classification: H4, H5, H11

Suggested Citation

Hausken, Kjell and Knutsen, John F., An Enabling Mechanism for the Creation, Adjustment, and Dissolution of States and Governmental Units (2010). Economics: The Open-Access, Open-Assessment E-Journal, Vol. 4, 2010-32. Available at SSRN: https://ssrn.com/abstract=1753520 or http://dx.doi.org/10.5018/economics-ejournal.ja.2010-32

Kjell Hausken (Contact Author)

Stavanger University College ( email )

PO Box 2557
N-4091 Stavanger
Norway

John F. Knutsen

Knutsen & Didriksen as ( email )

Norway

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