Politics of Order in Informal Markets: How the State Shapes Private Governance

Property rights are essential for economic exchange, but many governments fail to protect them. This book argues that threats from the government can force private organizations to promote trade, challenging the conventional wisdom that private good governance in developing countries thrives when the government keeps its hands off private group affairs.

\n Format: Hardback
\n Length: 200 pages
\n Publication date: 24 June 2021
\n Publisher: Cambridge University Press
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Property rights are crucial for economic exchange, yet many governments fail to adequately safeguard them. While private market organizations can provide an institutional framework to enforce agreements, their power also grants them the ability to exploit group members. Therefore, the question arises: Under what circumstances can private organizations create a stable environment for economic activity?

To answer this question, this book employs market case studies and a representative survey of traders in Lagos, Nigeria. The findings challenge the conventional wisdom that private good governance in developing countries thrives when the government keeps its hands off private group affairs. Instead, the author argues that leaders among traders behave in ways that promote trade primarily due to the threat of government intrusion.

The book explores various scenarios where the government's actions can force an association to behave in ways that promote trade. For instance, the government may impose regulations that restrict the entry of new competitors, making it difficult for existing members to expand their businesses. In such cases, the association may coerce its members to adhere to mutually beneficial agreements, such as price fixing or cartel formation, to protect their interests.

Furthermore, the book argues that the threat of government intrusion can also lead to the development of informal institutions that promote trade. For example, traders may form associations or networks to share information and coordinate their activities, which can help them avoid government interference and promote fair competition.

Overall, this book provides valuable insights into the dynamics of private organizations and the factors that influence their behavior in developing countries. It challenges the conventional wisdom that private good governance is solely dependent on government interference and suggests that the threat of government intrusion can play a significant role in promoting trade.

\n Weight: 392g\n
Dimension: 160 x 236 x 18 (mm)\n
ISBN-13: 9781108833493\n \n