Opting-Out

The Constitutional Economics of Exit

Bibliographic Data

ID2824893
AuthorsPeter Kurrild‐klitgaard (0000-0002-5897-361X, University of Southern Denmark, corresponding author)
Year2002
Volume61
Issue1
Pages123-158
Publication date2002-01-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueAmerican Journal of Economics and Sociology (JOURNAL)
Journal identifiersISSN: 0002-9246 • E-ISSN: 1536-7150
PublisherWiley (PUBLISHER • GB)
DOI10.1111/1536-7150.00154
OpenAlexW1991038190
LanguageEN
Citations received8
References cited16

The central aspect, which makes markets operate differently than governments, is the ability of market actors to "exit" from future interactions. This point is applied to constitutional analysis, with an emphasis on the constitutional possibility of individuals or groups in a society "exiting," wholly or partly, from the political community or from specific institutions within such. Hobbesian and Lockean states-of-nature are sketched using a common framework of some simple games, and the Lockean solution to the danger of tyranny is formalized. This solution is compared to the typical interaction in a market economy, where the possibility of "exit" from future interactions with disagreeable parties introduces severe restrictions on the possible exploitation. This analysis is extended to the political sphere, and it is argued in general terms that a constitutional set-up utilizing a semi-Lockean right to "exit" (e.g., federal structures with rights of secession, voucher systems, etc.) could be an efficient guarantee against sub-optimal solutions and function so as to reduce redistributive conflicts and make welfare-increasing transactions possible

Constitutional economics · Economics · Federalism · Function (biology) · Law and economics · Political economy · Political science · Politics · Secession · Voucher · American Constitutional Law and Politics · Economic Theory and Institutions · Law · Political Philosophy and Ethics

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