Finance:Stationary bandit theory
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Theory of the Stationary Bandit — theory of the origin of the state, developed by American scholars Martin C. McGuire and Mansur Olson.
Basic Principles
In this theory, the State is equated with a "stationary bandit" ("stationary bandit") who decides to settle in a specific territory, to unilaterally control it and to generate income from the population (carry out robberies) in the long term. This distinguishes him from "roving bandits" or "itinerant bandits" ("roving bandits"), whose aim is to extract maximum benefit in the short term. The robberies carried out by the "stationary bandit" take the form of regular taxation, and a rational "stationary bandit" sets such a level of taxation that leaves a portion of resources for the population to use for accumulation, investment, and subsequent increases in production and therefore profit that is taxed by the "stationary bandit." Furthermore, the "stationary bandit" stimulates economic activity and is interested in the economic development of the territory.[1]
Advantages and Disadvantages of the "Stationary Bandit" in Different Political Regimes
"Stationary Bandit" and Autocracy
The main problem for an autocrat is the threat of losing power, which can occur both as a result of revolution and as a result of conquest by a "roving bandit." Solving this problem historically involves establishing a dynastic form of governance; in cases where such a solution is not possible, there is a high likelihood that the "stationary bandit," not being confident in the stability of his power, transforms into a "roving bandit," aiming to increase his own well-being without concern for the needs of the population and ensuring sustainable economic growth.
"Stationary Bandit" and Democracy
Democracy, according to some authors, is the most economically favorable regime. However, M. Olson in his theory is not so unequivocal and notes both positive and negative points. Among the positive aspects, it is important to note, first of all, guarantees of property rights and the fulfillment of contractual obligations. Secondly, based on mathematical calculations, M. Olson concludes that under democracies, the tax rate will be lower than under autocracies. In other words, democracy prevents the extraction of a larger share of the surplus product for the benefit of rulers. Thirdly, the volume of public goods provided to the population turns out to be larger than under autocracy, as the leader needs to gain the support of the majority to win elections. Among the disadvantages, M. Olson notes, first of all, the fact that democratic leaders, like "stationary bandits," are guided by their own self-interest primarily. Secondly, in a democratic regime, the decision-making process and redistribution of national income are influenced by various interest groups, sometimes small and specialized, which lobby for decisions that do not serve the interests of the majority.[2]
Critique of Other Theories of the Origin of the State
Marxist Theory of the Origin of the State
The ideologues of Marxism (K. Marx, F. Engels, V. I. Lenin) link the origin of the state to the emergence of private property in society and the formation of two opposing groups — classes. The state is created by one class (owners, exploiters) for governance, increasing their own well-being, and suppressing another class (the oppressed class, the exploited). M. Olson is critical of this concept of the origin of the state, as he does not believe that classes represent "organized groups with common interests" that drive them to start a revolutionary struggle and facilitate social changes. On the contrary, individuals prefer not to engage in "class struggle" as they are primarily guided by personal interests; for them, it is sometimes more beneficial not to make additional efforts to change the social order but to remain on the sidelines.[3]
Social Contract Theory
The author also critiques the theory of the social contract (J. Locke, T. Hobbes, J.-J. Rousseau and others), according to which the state arises as a voluntary union that implies individuals give up some of their rights to the state in exchange for their own security and prosperity. M. Olson casts doubt on the possibility of collective action by individuals to achieve the common good in large groups (the costs and risks associated with providing the common good outweigh the potential benefits) due to the "free-rider effect" and points to the consequence of low economic productivity in such states, as individuals have no incentives to increase their contribution to the production of public goods.
Critique
Assumptions of State Formation: Logical Circle in M. Olson's Theory
Olson's theory explains why the population prefers a "stationary bandit" over a "roving bandit," but fails to point out the motives that lead "roving bandits" to become "stationary." The concept does not clarify why, in an uncontrolled competitive looting environment, "bandits" would have the urge to monopolize looting within a given territory. One could assume that "roving bandits" want to increase their profits by subduing populations under the control of other bandits, but this would mean that some local states already exist, contradicting M. Olson's theory.[4]
Role of the State
M. Olson asserts that the state is the sole factor possessing a monopoly on violence, whose behavior can be studied. According to Douglass North, this approach is fundamentally flawed because, first of all, the state manages society through a range of complex and specialized organizations. In addition, the dynamics of relations between the political elites in the ruling coalition also influence the interaction between the state and society. Secondly, the theory overlooks the fundamental problem of the state's acquisition of a monopoly on violence (how a coalition that structures the state and society emerges).[5]
Problem of Definitions
As a historical case study to support his theory, M. Olson refers to the situation in China in the 1920s, when the country was controlled by various military warlords, who ruthlessly plundered the population. However, one of the warlords — Feng Yuxiang — managed to subdue the others and establish his control over significant territories of China. According to Olson's theory, this is how a state emerges. However, some researchers consider it unjustified to use the term "state," as the advantage and ability to collect taxes from subjects in its territory do not automatically lead to the formation of a state. In such a case, it is rather the emergence of a "Quasi-state", an organization with a comparative advantage in exerting violence over a certain territory, but not being a state.[6]
References
- ↑ Mansur Olson Dictatorship, Democracy, and Development (1993) // Economic Policy: Journal. — Moscow: — № 1. — 2010. — Pp 170.
- ↑ Zaostrovtsev A. P. Mansur Olson on Autocracy, Democracy, and Development // Economics and Institutions. SPb: — 2010. — Pp. 140—149.
- ↑ Olson M. The Logic of Collective Action: Public Goods and the Theory of Groups. Translated from English. — Moscow: FEI — 1995. — P. 99. — ISBN 5-201-03380-6. (English: Logic of Collective Action: Public Goods and the Theory of Groups, 1965)
- ↑ Rolf Höijer Theft by Bandits and Taxation by Kings: A Critique of Mancur Olson on State-Formation // Political Studies Review. — Vol. 2. — № 1. — 2004. — Pp 24-38.
- ↑ North D. K., Wallis J., Weingast B. Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. — Moscow: Gaidar Institute Publishing, 2011. — 480 p. — ISBN 978-5-93255-303-9 (Eng. Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History, 2009).
- ↑ Kruglova E. A. The State is Obsolete: The Need for a New Definition of the State // Journal of Institutional Studies (Journal of Institutional Research). — No. 2. — 2015. — Pp 100—101.
Links
- Kolesnikov A. Country under the "Stationary Bandit" // Novaya Gazeta
- State Bandit / Peter and Mazepa, 22.01.2015
- Zolotarev V. Stationary Bandit, Roving Bandit and the False Alternative / kontrakty.ua, 25.03.2016
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