A MARKET FOR SOVEREIGN CONTROL? Joseph Blocher & Mitu Gulati* ABSTRACT Across the world, many regions are located in the wrong nations— wrong in the sense that the people of these regions believe they would be safer, happier, and wealthier if surrounded by different borders and governed by different leaders

A MARKET FOR SOVEREIGN CONTROL? Joseph Blocher & Mitu Gulati* ABSTRACT Across the world, many regions are located in the wrong nations— wrong in the sense that the people of these regions believe they would be safer, happier, and wealthier if surrounded by different borders and governed by different leaders. These people might be able to improve their lot by voting out their current government or by emigrating, but those are imperfect solutions and are often unavailable to those who need them most. We ask whether the addition of a new tool—a market for sovereign control—could help ameliorate the bad government problem by facilitating welfare-enhancing border changes. The essential elements of this market are already in place, albeit in ways that under-protect principles like democratic accountability. We suggest ways to design a market that could ameliorate those problems and improve the status quo, and specifically how that market might help ameliorate the current sovereign debt crisis in Ukraine.


A Market for Sovereign Control? [19-Mar-15 TABLE OF CONTENTS Abstract..................................................................................................................1 Table of Contents..................................................................................................2 Introduction...........................................................................................................3 I. The Elements of the Market............................................................................8 A. Starting Points...........................................................................................8 B. The Market Mechanism............................................................................9 1. Who Must Agree ..............................................................................9 2. Three Approaches to Price-Setting ................................................10 3. Best Practices ...................................................................................13 C. The Corporate Analogy............................................................................13 II. The Legality of the Market for Sovereign Control......................................16 A. The Traditional Rule: Territorial Sovereignty and National Control.....................................................................................................17 B. Modern Principles: Self Determination and Popular Control..............20 C. Filling the Gap...........................................................................................22 III. The Four Horsemen ......................................................................................25 A. War.............................................................................................................25 1. Preventing Incipient Conflicts........................................................26 2. Resolving Existing Disputes............................................................28 B. Colonialism ................................................................................................30 C. Anti-Democracy ........................................................................................33 D. Impossibility ..............................................................................................36 IV. Caveats and Complications...........................................................................38 Conclusion: Crimea 2015 .....................................................................................40