Protecting Your Protection in a Violent World: the Link between an States’s Organisation of Violence and its Constitutional Design

This paper analyses one of the most critical problems in all of political economy, i.e. the dilemma of credible commitment. Economic prosperity requires the presence of a state powerful enough to establish and enforce property rights, yet not so powerful that its presence destabilises these rights. Humphrey demonstrates that solutions to this dilemma, advocated by the literature, are incomplete because they fail to acknowledge a state’s source of power - namely, its ability to organise violence. By modelling the state as a protection contract and using formal lines of reasoning, Humphrey concludes that a state can strike the efficiency-enhancing balance between power and restraint by a) organising a monopoly on violence and b) organising the decision to employ violence as a team decision.