The State's Enforcement Monopoly and the Private Protection of Property

Journal of Institutional and Theoretical Economics, 2014, Vol. 170 (1), 5-23

19 Pages Posted: 17 Mar 2014  

Kristoffel R. Grechenig

Max-Planck-Institute for Research on Collective Goods

Martin Kolmar

University of St. Gallen - Institute of Economy and the Environment (IWOe-HSG); CESifo (Center for Economic Studies and Ifo Institute)

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Date Written: March 4, 2014

Abstract

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

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

Kristoffel R. Grechenig (Contact Author)

Max-Planck-Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany
+49 228 91416-51 (Phone)
+49 228 91416-851 (Fax)

HOME PAGE: http://sites.google.com/site/kristoffelgrechenig

Martin Kolmar

University of St. Gallen - Institute of Economy and the Environment (IWOe-HSG) ( email )

Varnbüelstrasse 14
CH-9000 St. Gallen
Switzerland
+41 (0)71 224 25 35 (Phone)
+41 (0)71 224 23 02 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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