A Theory of the State: Economic Rights, Legal Rights, and the Scope of the State

Political Economy of Institutions and Decisions

by Yoram Barzel

This book models the emergence and evolution of the rule-of-law state. The protector or ruler is assumed to be self-seeking. Individuals will install a protector only after they create institutions to control him. Organized protection engenders legal institutions that enforce rights. A "state of nature" then gradually turns into a rule-of-law state. Individuals employ both the state and other third parties for enforcement. The fraction of agreements that the state enforces determines its scope. Rule-of-law states encourage market transactions and standards that facilitate trade. The larger the domain of the state's ultimate enforcer, the greater the advantage of scale economies to contracting. This force may explain the creation of rule-of-law empires.

Genres: Economics, Politics

306 pages, Paperback

First published December 3, 2001

Reviews

[João Pedro Bastos · Rating 4 out of 5]

The book is outstanding exercise in economic theory. Barzel applies the fundamentals of price theory to explain how states work, the inherent trade-offs between protection and liberty.

By giving more power to the state in order to provide protection to those under its jurisdiction, the citizens are also incurring in risks associated with the “protector” becoming a dictator for having too much power.

Nevertheless, the book is somewhat repetitive. If one reads the introduction and the conclusions at the end of each chapter, there’s no substantial loss.