Non-Territorially Unbundling the Fiscal Commons

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: May 2016


This paper conceptualises polities as commons and describes how changes to access rules and boundary rules serve to reallocate property rights within and across political commons. Fiscal processes typically transform private property into common property, with the state becoming the forum where rules for governing the commons are decided. In a political commons the fiscal capacity of the whole economy is the analogous exploitable resource. I outline how polities are constituted as fiscal commons, and describe how this often portends to exploitation and inefficiency. Next I present an analysis of political-jurisdictional systems as complex institutional structures of access rules and boundary rules, which either sustain or deplete social value. Citizens differentially contribute to and draw from political commons according to these rules, and as a result, changing access to and boundaries of political commons modifies the allocation of property rights in a polity. I argue that by generating viable exit options and membership externalities in multiple, overlapping majorities, non-territorial unbundling tempers the tragedy of the fiscal commons.

Keywords: non-territorial, unbundling, fiscal commons, decentralisation, exit

JEL Classification: H00, H11, P43, D00

Suggested Citation

MacDonald, Trent, Non-Territorially Unbundling the Fiscal Commons (May 2016). Available at SSRN:

Trent MacDonald (Contact Author)

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

Level 12, 239 Bourke Street
Melbourne, Victoria

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