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date: 18 April 2019

Abstract and Keywords

In the context of the rationale and structure of group formation, Mancur Olson drew attention to the fact that despite problems of inefficiency in public- goods provision, and irregularity in pricing and burden sharing, individuals voluntarily form groups to provide themselves with public goods. This preoccupation with the economic incentives in groups that led him to imagine the origin of the state as an economic group with beginnings in anarchy distinguished by and plagued by roving banditry, with its random disorder and erratic tax theft. The roving bandit who had settled down to become a king or stationary bandit would become the next stage, succeeding anarchy and improving upon life for both bandit and subjects. This chapter recounts the main elements in the stationary bandit theory, together with a view of the economic structure of governance and its reciprocal relations with the social economy, and suggests routes for further application.

Keywords: economic theory of groups, autocracy, stationary bandit, kleptocracy, consensus, democracy, public goods, individual rights, taxation, coercion

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