[I recently discovered this piece on my hard drive. It seems at some point to have had some connection with the Santa Clara Journal of International Law—possibly a text written for a conference, the journal organized but never actually published. 4/9/13]



I am speaking today as an economist, not a lawyer or moral philosopher. My own view of rights is that they pertain to persons, not to peoples. I would rather be a subject of a liberal empire that respects my individual rights than a citizen of a democratic tyranny that violates them. The arguments for and against secession that interest me have to do, not with whether peoples have a right to self-determination but whether making secession easier will make the world a better or a worse place for the persons who live in it.


To answer that question, I begin with a short, but I think relevant, digression. Many years ago I spent a summer in Washington, mostly working with people concerned about state and local finance. One of the problems that concerned them was what they called "tax competition."


Consider a company that plans to build a new factory. Various state or local governments want it in their territory to increase their tax base. So they offer the company special favors of one sort or another--freedom from taxation for five years say--if it will locate in their state or town. The resulting bidding war reduces the amount the governments end up getting from the firm.


People who worry about tax competition have things exactly backwards. The problem is not how governments are to get their hands on enough money; that one, unfortunately, was solved a long time ago. The problem is how to make sure that governments do the right things with the money--that they spend it in ways that provide enough benefit to the people the money comes from so that they are on net better, not worse, off as a result of the government's activities.


Seen from that standpoint, tax competition is not the problem but the solution. It leads to low taxes only if the taxes are not producing services of value to the taxpayers--in which case low taxes are a good thing. A jurisdiction that offers no tax breaks but provides services that the factory values at more than their cost--good schools, for example, that make it easier to hire employees--will be more attractive to the firm than a jurisdiction that offers low taxes and low services. It is only if high taxes are exploitative--if they are spent on things of no value to the people they are collected from--that tax competition will discourage them. The net effect of competition among jurisdictions for taxpayers, like the net effect of competition among firms for customers, is to make exploitation more difficult and the efficient production of desired services more likely.


My argument today is that easy secession has a similar effect. To the extent that a region whose people believe they are getting a bad deal from the central government--paying more and getting less than if they ran their own affairs--can secede, that gives central governments a strong incentive not to try to exploit regions. The easier secession is, the more governments are constrained to give value in exchange for the costs they impose upon their subjects. The result is not as close to an efficient outcome as the result of ordinary competition on private markets, in part because some of the goods governments produce--although fewer than often claimed--are public goods for a public larger than a region, and in part because decisions by regions are themselves political acts, hence reflect individual interests less accurately than decisions by individuals. But it should still be an improvement on the situation that exists when the government has an unchallenged monopoly, as it does if secession is not an option.


There are a number of objections that might be raised against this argument. I will consider four.


Preventing Benevolent Redistribution


One possible problem, suggested by comments that Professor Buchanan made yesterday, is that easy secession may prevent exploitative taxation even when it should not be prevented--when, for example, the central government is taxing a rich region for the benefit of a poor region. In my view, this possibility is sufficiently unlikely in the real world so that there is no need for me to argue with professor Buchanan about whether or not some redistribution is permitted, or required, by principles of justice.


No doubt it is theoretically possible that a poor and powerless region of a country will by good fortune gets its hands on the levers of power and use them to benefit its citizens at the expense of its richer neighbors. No doubt it is theoretically possible that the benefit will be directed to the poor people of the poor region, rather than appropriated by their not-poor leaders. But I don't think, on either theoretical or empirical grounds, that it is the way to bet.


Consider, for a real world example that comes as close to this situation as seems likely, the attempted secession of Biafra from Nigeria. Before the civil war, the people of Biafra were, on average, better off than the people in the rest of Nigeria. But it would take a very optimistic view of the subsequent history to argue that the result of the suppression of Biafran independence was a flow of money from Biafra to poor people elsewhere in Nigeria. It seems fairly clear that the actual result was a kleptocracy in which government revenue flowed, for the most part, into the hands of people much richer than the average Biafran.


The Problem of Exploitative Secession


A second and more serious argument against easy secession is that a region may secede, not in order to prevent its central government from exploiting it, but in order to be free to exploit minorities within its own population. The case of Kosovo, where it can plausibly be argued that the ethnic Albanians wish to secede from Serbia in part in order to be free to oppress the ethnic Serbians, is an obvious example.


One way of reducing this problem is to require a supermajority for secession, perhaps three quarters or more. In many cases--Biafra, for example--this should be an easy requirement to meet. One advantage of such a requirement is that it gives groups agitating for secession an incentive to propose boundaries that, as nearly as possible, exclude from the new state those people who do not wish to be in it, thus increasing their majority and decreasing subsequent problems.


A second way of reducing the problem is to extend secession a little farther down the scale. To the extent that a minority within the new state formed by secession is itself free to secede, either to rejoin the parent state or to form a new state, that will limit the ability of the new government to oppress it. This is not, of course, a purely theoretical possibility. The state of West Virginia exists because, when Virginia seceded from the union, what is now West Virginia seceded from Virginia. I have a vague memory that one or two counties, or parts of one or two counties, then seceded back to Virginia, but I will not swear to that part of the story.


One important point, which I will return to later, is that the farther down secession goes, the less the opportunity for exploitation by the resulting set of states. The reason is that exploitation is constrained by mobility.[1] If the only way I can escape an oppressive state is to leave everyone and everything I know and travel far away to a strange country where nobody speaks my language, the state can get quite oppressive before very many people are willing to leave. If all I have to do is move across the street, on the other hand, it will not take much oppression to make me do it.


Protecting Non-Territorial Minorities


A third problem with using the threat of secession to prevent state exploitation is that it assumes that the target of such exploitation is a region. It does not solve the problems of non-territorial minorities. That would include nomadic peoples--a current issue in north-west Africa. It would also include dispersed ethnic minorities, enthusiastic adherents of a new religion (a situation China is currently facing), and the like.


I see two possible solutions. One is to abandon the idea that a state has monopoly power in a particular territory and move in the direction of non-territorial states or state substitutes. A historical example would be the situation of the Catholic church in medieval Europe. The English Crown did not have jurisdiction over clerics, with the result that a cleric accused of a serious offense could plead benefit of clergy and have his case transferred to a church court to be tried under church law. Neither the crown nor the church had complete sovereignty over England. A more extreme example of a non-territorial system was sketched out in my first book, The Machinery of Freedom, where I proposed institutions in which rights were protected and disputes settled through a system of competing private firms--a system of ordered anarchy. A historical example of a non-territorial system of law was discussed in an old article of mine on the institutions of saga period Iceland,[2] a society where the nearest equivalent of "local citizenship" was the voluntary relation between Godi (sometimes misleadingly translated "chieftain") and thingman.


A less radical solution along similar lines was suggested by some of Professor Buchanan's comments yesterday. One can imagine a society in which a single government claims ultimate authority, but in which large parts of what we usually think of as governmental authority have been dispersed to more nearly voluntary associations.


The middle ages provide historical examples of such polities. Consider the Muslim case. Medieval (and modern) Sunni Muslims recognize four different, but mutually orthodox, schools of law. While certain schools are more widely accepted in certain geographical areas than others, there is no strict relation between where you live and what school of law you accept. The result was that a major Muslim city would have at least four different court systems, one for each of the schools of law--and possibly additional courts systems for tolerated groups such as Christians, Jews, or Shia Muslims. Presumably the system worked because most legal disputes were intracommunity--Maliki with Maliki, Hanbali with Hanbali, Jew with Jew. Hence for most disputes the problem of conflicts between parties identifying with different communities did not arise. Similarly, Welsh in Wales were not under English law until the 16th century and Muslims in Spain remained under Muslim law for a century or so after they were conquered by Christians. In this respect, at least, the modern state with its unitary legal system is less tolerant of diversity than the states of the middle ages.


Regions That Are Not Economically Viable


A final objection that may be raised to easy secession as a way of controlling states is that a region may not be economically viable, making the threat to secede unpersuasive and the act imprudent.


The obvious response is that most independent countries are not economically viable either--that is to say, most countries would be substantially worse off if they were surrounded by a high wall and unable to trade across it. The reason that is not a serious problem is that existing countries are not limited to trading within their borders. Nor are new countries. As long as there is something reasonably close to free trade in the world, and as long as communication with the outside world is not effectively blocked by the country being seceded from, even a very small country can function as a politically independent part of an economically interdependent world.


Getting There From Here


My argument so far has attempted to show that the world would be a better place if secession were easier. That leaves an obvious question--how does one get governments to permit secession, given the obvious advantage to them of preventing it, including the advantage of remaining free to exploit politically weak regions?


Insofar as I have an answer to that question, it is that one makes secession easier by persuading lots of people that easy secession is a good thing. That does not, of course, guarantee easy secession. But it does increase the costs, internal and external, of suppressing secession. It is worth noting that what ultimately ended slavery in the 19th century was not the British navy, useful although its efforts in suppressing the slave trade may have been, but the increasingly widespread belief that slavery was a bad thing--a belief that resulted in slavery being independently abolished, through a variety of different mechanisms, in the West India, the U.S., Brazil, and elsewhere.


One further observation is that, to the extent that people come to accept the sort of argument I have been sketching, one conclusion they may reach is that supporting the right of secession abroad is a good way of giving their own government a reason not to mistreat them.


A final question that I have not yet dealt with is just how large a region must be in order for my arguments for easy secession to apply. My own answer is that the minimal region consists of one person. Some of you may reply, correctly enough, that whether or not that is a good argument in principle, it is not a politically viable policy this year, nor is it likely to be any year soon. But my argument does not depend on the question of how far down the geographical ladder secession is permitted. The argument is not about all or nothing but about more or less.

[1] In C. Northcote Parkinson's immortal words, "When things get too bad, the Israelites start looking at the atlas. There are probably better places to be than Egypt." (check the exact quote and source)

[2] "Private Creation and Enforcement of Law: A Historical Case, Journal of Legal Studies …  .