Private Governance: Creating Order in Economic and Social Life

Hardcover | July 15, 2015

byEdward Peter Stringham

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From the first stock markets of Amsterdam, London, and New York to the billions of electronic commerce transactions today, privately produced and enforced economic regulations are more common, more effective, and more promising than commonly considered. In Private Governance, prominent economist Edward Stringham presents case studies of the various forms of private enforcement, self-governance, or self-regulation among private groups or individuals that fill a void that government enforcement cannot. Through analytical narratives the book providesa close examination of the world's first stock markets, key elements of which were unenforceable by law; the community of Celebration, Florida, and other private communities that show how public goods can be bundled with land and provided more effectively; and the millions of credit-cardtransactions that occur daily and are regulated by private governance. Private Governance ultimately argues that while potential problems of private governance, such as fraud, are pervasive, so are the solutions it presents, and that much of what is orderly in the economy can be attributed toprivate groups and individuals. With meticulous research, Stringham demonstrates that private governance is a far more common source of order than most people realize, and that private parties have incentives to devise different mechanisms for eliminating unwanted behavior. Private Governance documents numerous examples of private order throughout history to illustrate how private governance is more resilient to internal and external pressure than is commonly believed. Stringham discusses why private governance has economic and social advantages over relying ongovernment regulations and laws, and explores the different mechanisms that enable private governance, including sorting, reputation, assurance, and other bonding mechanisms. Challenging and rigorously-written, Private Governance will make a compelling read for those with an interest in economics,political philosophy, and the history of current Wall Street regulations.

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From the first stock markets of Amsterdam, London, and New York to the billions of electronic commerce transactions today, privately produced and enforced economic regulations are more common, more effective, and more promising than commonly considered. In Private Governance, prominent economist Edward Stringham presents case studies o...

Edward Peter Stringham is the Davis Professor of Economic Organizations and Innovation at Trinity College, Hartford, Connecticut. Stringham is president of the Society for the Development of Austrian Economics, former president of the Association of Private Enterprise Education, editor of the Journal of Private Enterprise, editor of tw...
Format:HardcoverDimensions:296 pages, 9.29 × 6.3 × 1.1 inPublished:July 15, 2015Publisher:Oxford University PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0199365164

ISBN - 13:9780199365166

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Table of Contents

Why private governance?1. Introduction2. Beyond the deus ex machina theory of law3. Rules from voluntary associations as an alternative to coercive ones: Governance as a club goodPrivately governed markets in history and modern times4. Markets without enforcement: Reciprocity and reputation mechanisms in the world's first stock market5. The evolution of rules in exclusive clubs: From coffeehouses to the London Stock Exchange6. Markets creating transparency: Competing listing and disclosure requirements from the Big Board in New York to the Alternative Investment Market in London7. How technologically advanced markets can work even when fraud is "legal": Ex ante risk management by PayPal and other intermediaries8. Bundling governance with bricks and mortar: Private policing in colleges, in California, North Carolina, and beyond9. The most personal form of private governance: Individual self-governance10. When third party review is "necessary": Adjudication by contract11. Does private governance work in the most complex markets? Successful risk management on Wall Street even in the wake of the 2008 economic downturnLessons of private governance12. The relationship between public and private governance: Does the state help or crowd out good governance?13. Applying Hayek's insights about discovery and spontaneous order to governance14. The unseen beauty that underpins markets

Editorial Reviews

"Masterfully weaves economic analysis with little-known history and elegant storytelling to demonstrate the power of individuals to create order without law or government. Essential reading for policy-makers, academics, and anyone else with questions about the power of freedom." --Marcus Cole, Stanford University