Seasteading Public Choice Paper
Patri and I have been working on an academic paper making the case for seasteading from a public choice perspective. Patri will be presenting a working version of this via video to the Australasian Public Choice Conference down here in New Zealand next week.
The paper is here. We’re still working on it, so we’d be grateful for comments!
Here’s the abstract:
We develop a dynamic theory of the industrial organization of government which combines the insights of public choice theory and a dynamic understanding of competition. We argue that efforts to improve policy should be focused at the root of the problem – the uncompetitive governance industry and the technological environment out of which it emerges – and suggest that the most promising way to robustly improve policy is to develop the technology to settle the ocean.
Thanks to Eric Crampton for organizing the event and encouraging us to get a working paper out earlier rather than later.
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Let A Thousand Nations Bloom 
Fabulous paper Brad and Patri, great work! I look forward to hearing the response from the conference participants.
I would, of course, argue somewhat more on behalf of Private Free Cities as yet another alternative for competitive governance, but until Kevin and I get our paper out on our Private Free Cities you make a reasonable case that Seasteading is the most plausible alternative for the time being.
But your overall work on analyzing the implications of barriers to entry in the market for governance, and the implications for allowing for freer entry into the governance marketplace is superb and much needed.
I see this paper being broken up into two different papers:
1. A general analysis of the implications of allowing competitive entrance into the marketplace for governance.
2. An analysis of potential ways to do this, with a fuller description of the challenges and opportunities of each approach.
The first paper would be an important theoretical contribution to the public choice literature – I’d love to see it open up an entirely new line of public choice research.
The second paper would be far more contingent on empirical details, as with Seasteading alone one could go into the various opportunities and constraints facing ships-as-seasteads, stationary seasteads, and Patri’s modular floating seastead communities. One could go into a similarly contingent and empirical analysis of Charter Cities, Private Free Cities, Secession, Real Sovereignty for Indigenous Peoples, etc.
By means of separating out the theoretical analysis from the contingent real world strategies, you can avoid having questions about the empirical details of seasteading distract readers from the rock-solid case you sketch for competitive governance.
Thanks for pointing out the problem, Pedro! Neither of us are experts in IO, so this is very helpful. If there’s anything else we get wrong or overlook, we’d certainly appreciate more feedback.
You paper looks very interesting; I imagine we might end up citing it.
You say there seems to be an inverted-U relationship between competition and innovation, so that “industries of moderate competitiveness are more innovative than those at either extreme”. There isn’t any evidence of this at the industry level. The inverted-U relationship has been found between competition and firm-level innovation. If very competitive industries have more firms, then they may still have more innovation overall.
The only paper I’ve found that tests for an inverted-U at the industry level is “Competition and Productivity Growth in South Africa,” by Aghion, Braun, and Fedderke. They find a strictly positive relationship at the industry level, but an inverted-U at the firm level (between measured competition and productivity growth).
I’ve written a paper that develops a formal model of competition and innovation that accounts for these two relationships, “Competition as a Discovery Procedure: Hayek vs Schumpeter in a Model of Innovation.” It incorporates the ideas about Hayekian uncertainty that you discuss in your paper. It’s available at http://individual.utoronto.ca/pedro_bento/Bento_Competition_Dec01.pdf .