The Political-Jurisdictional Coase Theorem
Posted: 31 Jul 2016
Date Written: September 10, 2015
This paper proposes an extension of the Coase theorem to explain how political systems and jurisdictions change. This model suggests that it is the relative imposition of transaction cost over different modes of jurisdictional change as well as wealth effects that enable or prevent variously efficient institutional forms. We show how the framework corresponds to a taxonomy of political-jurisdictional transitions and explore how the problem of nation/state incongruities can be reinterpreted in light of the political-jurisdictional Coase theorem.
Keywords: Coase theorem, political exchange, nation-state, jurisdiction, secession
JEL Classification: H00, H11, P43, D00
Suggested Citation: Suggested Citation