Coordination and Coercion: the Nature of Rules, Governments, States, and Social Dynamics

John Wallis (University of Maryland)
Douglass North (Washington University)

Abstract: This paper considers how societies come to adopt and credibly enforce impersonal rules. Impersonal rules “treat everyone the same.” Impersonal rules are distinct from “anonymous rules.” Anonymous rules enable people who do not know one another personally to deal credibly with each other because they know the identity of the organization that the other belongs to. Anonymous rules are not “personal rules,” but they do not result in treating everyone the same. Most societies can support anonymous rules, not impersonal ones. Governments are inevitably involved in impersonal rules because they must be publicly known and publicly enforced to be credible. Governments are not inevitably involved in the creation and enforcement of anonymous rules, which require organizational identities. We examine the nature of rules, the nature of enforcement, and the nature of organizations. The standard way of defining the state as the organization with a monopoly on the legitimate use of violence (Weber), the organization with priority in the use of violence (Tilly), or a comparative advantage in violence (North), ignores the fact the rules that apply in most societies that are actually enforced are anonymous rules that rely on a substantial element of voluntary self-enforcement. Most rules are enforced because of the inherent value of coordination that arise between credible rule followers, made concrete by the organizations that individuals belong to. The paper argues that the social dynamics generated by coordination enable governments in modern developed societies is what enables governments to obtain a monopoly on legitimate violence.


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