Governance efficiency with and without government
This paper explores the social interactions between public and private agents through a comparative institutional approach to consider the roles of community and government in societies with and without State. Using a theoretical framework where the private agents have different political power and they are, or are not, able to efficiently coordinate their actions, we study how public, private, and self-governance affect the level of welfare and capacity in each society. In particular, assuming two alternative private agent motivations (self-interested or other-regarding preferences) and community behaviors (collectivistic and individualistic societies), and a public agent as a bureaucracy with coercive power, that could either be partisan or bipartisan if it can, or cannot, be captured by private agents, we find that governance efficiency and capacity in the societies with State are lower when the government is partisan rather than when it is bipartisan. Moreover, society rankings for welfare and governance capacity are the same; thus, the welfare of a society is higher when the governance capacity is higher.
We would like to thank the two anonymous reviewers for their very insightful comments. We also acknowledge the participants to the Rimini Conference in Economics and Finance 2018 (RCEF2018, Rimini, Italy) and to the Happiness Economics and Interpersonal Relations Conference 2018 (HEIRS 2018, Naples, Italy) where a previous version of this paper was presented.
Compliance with ethical standards
Conflict of interest
The authors declare that no funding was received and that they have no conflict of interest.
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