The Political-Jurisdictional Coase Theorem

Posted: 31 Jul 2016

See all articles by Trent MacDonald

Trent MacDonald

RMIT University, Faculty of Business, School of Economics, Finance and Marketing, Students

Date Written: September 10, 2015

Abstract

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

MacDonald, Trent, The Political-Jurisdictional Coase Theorem (September 10, 2015). Available at SSRN: https://ssrn.com/abstract=2815765

Trent MacDonald (Contact Author)

RMIT University, Faculty of Business, School of Economics, Finance and Marketing, Students ( email )

Level 12, 239 Bourke Street
Melbourne, Victoria
Australia

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