Journal of Institutional and Theoretical Economics, 2014, Vol. 170 (1), 5-23
19 Pages Posted: 17 Mar 2014
Date Written: March 4, 2014
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 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, such as private armies and mercenaries.
Keywords: Centralization, Law and Economics, State, Contest Theory, Private Protection
JEL Classification: K42, P14, P37, P48, N40
Suggested Citation: Suggested Citation
Grechenig, Kristoffel R. and Kolmar, Martin, The State's Enforcement Monopoly and the Private Protection of Property (March 4, 2014). Journal of Institutional and Theoretical Economics, 2014, Vol. 170 (1), 5-23. Available at SSRN: https://ssrn.com/abstract=2404617