1 - Introduction

Summary

In many parts of the world property rights are not publicly guaranteed. Private market associations can fill this gap by providing an institutional structure to enforce agreements, but with this power comes the ability to extort from group members. Chapter 1 introduces the book’s motivating puzzle: Despite shared need for private good governance, not all private group leaders provide pro-trade policies. Under what circumstances do private associations provide a stable environment for economic activity? The chapter introduces the book’s main argument, that threats from the government can motivate group leaders to provide trade-promoting policies, but that within-group competition matters as well. The chapter then overviews the book’s key theoretical contributions to the political economy of development and private governance literatures. Next, it introduces theoretical expectations for additional variables, besides government threats and competition, that could shape private good governance. It then provides an overview of Lagos, Nigeria, the context in which the research takes place. Last, it overviews the book’s methods, and provides a road map for the rest of the book.