Institutional Competition: An Orientative Framework

In economics, it is generally agreed that competition discloses knowledge, enhances efficiency and restrains power. It is also generally accepted that one main reason for the evolution of modern states has been that certain goods, due to their non-exclusive character, are not supplied by markets — for example, legislation and social services. It seems to follow logically that the state is forced to be in a monopoly position precisely because no one else is prepared to provide these goods. Unfortunately a monopolistic setting not only lacks a device that may serve as a discovery procedure for knowledge, but it also entails the dangers of inefficient provision of goods and a concentration of power that may eventually lead to a Hobbesian Leviathan. Therefore a predicament seems inevitable.