Working Paper: “Legal Polycentrism and the Circularity Problem”
Legal polycentrism studies the provision of security and dispute adjudication through competing protection agencies rather than a government monopoly. To show that competition between protection agencies would have beneficial consequences, polycentrists often cite results from price theory about market competition. But there is a circularity problem here: markets presuppose a legal framework; hence before polycentrists can employ price theoretic arguments about market competition, they must first show that the legal requirements of markets are satisfied, that is, that property rights and contracts are enforced. If these requirements are not satisfied, it is illegitimately circular to draw on market competition as an argument for legal polycentrism.
I’ve expanded upon and revised my argument, so check it out!